Q.1. What is NEFT?
Ans : National Electronic
Funds Transfer (NEFT) is a
nation-wide system that
facilitates individuals to
electronically transfer
funds from any bank branch
to any other bank branch in
the country.
Q.2. Are all bank
branches in the country part
of the NEFT funds transfer
network?
Ans : For being part of the
NEFT funds transfer network
a bank branch has to be NEFT-enabled.
As at end-November 2009 as
many as 62,000 branches /
offices of 94 banks in the
country (out of around
75,000 bank branches) are
NEFT-enabled. Steps are
being taken to further widen
the coverage both in terms
of banks and branches.
Q.3.
How can one know which bank
branches are part of the
NEFT network?
Ans : The list of bank
branches participating in
the NEFT system is available
on the website of Reserve
Bank of India at
http://www.rbi.org.in/scripts/neft.aspx.
Details will also be
available with the banks /
branches participating in
the NEFT system.
Q.4.
Who can transfer funds using
NEFT?
Ans : Individuals, firms
or corporates maintaining
accounts with a bank branch
can transfer funds using
NEFT. Even such individuals,
firms or corporates who do
not have a bank account
(walk in customers) can also
deposit cash at the
branch with instructions to
transfer funds using
NEFT. A separate
Transaction Code (No. 50)
has been allotted in the
NEFT system to facilitate
walk-in customers to deposit
cash and transfer funds to a
beneficiary. Such customers
have to furnish full details
including complete address,
telephone number etc.
NEFT, thus, facilitates
originators or remitters to
initiate funds transfer
transactions even without
the need for having a bank
account.
Q.5. Who can receive
funds through the NEFT
system?
Ans : Individuals, firms or
corporates maintaining
accounts with a bank branch
can receive funds through
the NEFT system. It is,
therefore, necessary for the
beneficiary to have an
account with the destination
bank branch in the country.
The NEFT system also
facilitates one-way
cross-border transfer of
funds from India to Nepal.
This is known as the
Indo-Nepal Remittance
Facility Scheme. A remitter
can transfer funds up to
Indian Rupees 50,000/- from
any of the NEFT-enabled
branches in India to Nepal,
irrespective of whether the
beneficiary in Nepal
maintains an account with a
bank branch in Nepal or not.
The beneficiary would
receive funds in Nepalese
Rupees. A separate
Transaction Code (No. 51)
has been allotted in the
NEFT system to facilitate
the transfer of funds from
India to Nepal. Further
details on the Indo-Nepal
Remittance Facility Scheme
are available on the website
of Reserve Bank of India at
http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf.
Q.6.
Is there any limit on the
amount that could be
transferred using NEFT?
Ans : No. There is no limit
– either minimum or maximum
– on the amount of funds
that could be transferred
using NEFT. However, for
walk-in customers mentioned
at Q.4 and Q.5 above,
including these remitting
funds under the Indo-Nepal
Remittance Facility Scheme
the maximum amount that
could be transferred is Rs.
50,000.
Q.7.
Whether the system is centre
specific or has any
geographical restriction?
Ans : No, there is no
restriction of centres or of
any geographical area inside
the country. The NEFT system
takes advantage of the
centralised accounting
system in banks. For the
purpose, the account of a
bank that is originating or
receiving funds transfer
instructions, is operated
centrally at Mumbai. The
branches participating in
NEFT can, however, be
located anywhere across the
length and breadth of the
country.
To facilitate operation of
the Indo-Nepal Remittance
Facility Scheme, the NEFT
system also extends to
branches of banks in Nepal
(as detailed at Q.5 above).
Q.8. What are the
operating hours of NEFT?
Ans : Presently, NEFT
operates in batches from 9
a.m to 5 p.m. There are six
settlements at 9 a.m, 11 a.m,
12 noon, 1 p.m, 3 p.m and 5
p.m on week days and three
settlements at 9 a.m, 11 a.m
and 12 noon on Saturdays.
Q.9.
How does the NEFT
system operate?
Step-1 : An individual /
firm / corporate intending
to originate or transfer
funds through NEFT has to
fill an application form
giving details of the
beneficiary (like, name of
the beneficiary, name of the
bank branch where the
beneficiary has an account,
IFSC of the beneficiary bank
branch, account type and
account number). The
application form will be
available at the originating
bank branch. The originator
authorises the branch to
debit his account and remit
the specified amount to the
beneficiary. Customers
enjoying net banking
facility offered by their
bankers can initiate the
funds transfer request
online. Some banks offer the
NEFT facility even through
the ATMs. Walk-in customers
will, however, have to give
their contact details
(complete address and
telephone no. etc.,) to the
branch. This will help the
branch to refund the money
to the customer in case
credit could not be afforded
to the beneficiary’s bank
account or the transaction
is rejected / returned for
any reason.
Step-2 : The originating
bank branch prepares a
message and sends the
message to its pooling
centre (also called the NEFT
Service Centre).
Step-3 : The pooling centre
forwards the message to the
NEFT Clearing Centre
(operated by National
Clearing Cell, Reserve Bank
of India, Mumbai) to be
included for the next
available batch.
Step-4 : The Clearing Centre
sorts the funds transfer
transactions destination
bank-wise and prepares
accounting entries to
receive funds from (debit)
the originating banks and
give the funds to (credit)
the destination banks.
Thereafter, bank-wise
remittance messages are
forwarded to the destination
banks through their pooling
centre (NEFT Service
Centre).
Step-5 : The destination
banks receive the remittance
messages received from the
Clearing Centre and pass on
the credit to the
beneficiary accounts.
Q.10.
What is IFSC?
Ans : IFSC or Indian
Financial System Code is an
alpha-numeric code that
uniquely identifies a
bank-branch participating in
the NEFT system. This is a
11 digit code with the first
4 characters representing
the bank, and the last 6
characters representing the
branch. The 5th character is
a 0 (zero). IFSC is used by
the NEFT system to route the
messages to the destination
banks / branches.
Q.11.
How can the IFSC of a
bank-branch be found?
Ans : Bank-wise list of
IFSCs is available with all
the bank-branches
participating in NEFT. List
of bank-branches
participating in NEFT and
their IFSCs is available on
the website of Reserve Bank
of India at
http://www.rbi.org.in/scripts/neft.aspx.
All banks have also been
advised to print the IFSC of
the branch on cheques issued
by branches to their
customers. For net banking
customers many banks have
also enabled online search /
pop-up of the IFSC of the
destination bank branch.
Q.12.
What are the processing or
service charges for NEFT
transactions?
Ans : Reserve Bank of India
has waived the processing or
service charges for member
banks till March 31, 2010.
Accordingly, member banks
participating in NEFT need
not pay any processing or
service charges to Reserve
Bank of India. Further,
processing or service
charges to be levied by the
member banks from their
customers have also been
rationalised by Reserve Bank
of India as under: –
a) Inward transactions at
destination bank branches
(for credit to beneficiary
accounts)
– Free, no
charges to be levied from
beneficiaries
b) Outward transactions at
originating bank branches
(charges for the remitter)
– For
transactions up to Rs. 1
lakh –
Charges not exceeding Rs. 5.
– For
transactions of Rs. 1 lakh
and above – Charges not
exceeding Rs. 25.
Note: Charges applicable for
transferring funds from
India to Nepal using the
NEFT system (under the
Indo-Nepal Remittance
Facility Scheme), are as
under –
a) Originating bank branch
in India – Maximum Rs. 5 per
transaction.
b) State Bank of India in
India – Rs. 20 per
transaction if the
beneficiary maintains an
account with Nepal SBI Ltd.
(NSBL).
c) State Bank of India
shares this amount equally
with NSBL. NSBL would not
charge any additional amount
for crediting the account of
the beneficiary.
d) In case the beneficiary
does not maintain an account
with NSBL, an additional
amount would be charged @ Rs.
50 for remittances up to Rs.
5,000 and Rs. 75 for
remittances above Rs. 5,000.
The charges would, thus, be
a minimum of Rs. 25 or a
maximum of Rs. 100 depending
on the value of transaction
and the manner in which
credit is afforded to the
beneficiary.
Originating bank branches
have been advised to recover
the entire charges from the
remitter as per the
structure detailed above and
pass on the appropriate
amount to SBI after
retaining their share (of Rs.
5).
Q.13. When can
the beneficiary expect to
get the credit to his bank
account?
Ans : The beneficiary can
expect to get credit for the
first four batches on week
days (i.e., transactions
from 9 a.m to 1 p.m from
Monday to Friday) and the
first two batches on
Saturdays (i.e.,
transactions from 9 to 11
a.m) on the same day. For
transactions settled in the
last two batches on week
days (i.e., transactions
settled in the 3 and 5 p.m
batches) and the last batch
on Saturdays (i.e.,
transactions handled in the
12 noon batch) beneficiaries
can expect to get credit
either on the same day or on
the next working day morning
(depending on the type of
facility enjoyed by the
beneficiary with his bank).
The timelines for
remittances to Nepal using
the NEFT system (under the
Indo-Nepal Remittance
Facility Scheme) are
separate at
http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf.
Q.14.
Who should be contacted in
case of non-credit or delay
in credit to the beneficiary
account?
Ans : In case of non-credit
or delay in credit to the
beneficiary account, the
NEFT Customer Facilitation
Centre (CFC) of the
respective bank can be
contacted (the originator
can contact his bank’s CFC;
the beneficiary may contact
the CFC of his bank).
Details of NEFT Customer
Facilitation Centres of
banks are available on the
websites of the respective
banks. The details are also
available on the website of
Reserve Bank of India at
http://www.rbi.org.in/scripts/neft.aspx.
If the issue is not resolved
satisfactorily, the NEFT
Help Desk (or Customer
Facilitation Centre of
Reserve Bank of India) at
National Clearing Cell,
Reserve Bank of India,
Mumbai may be contacted
through
e-mail or by addressing
correspondence to the
General Manager, Reserve
Bank of India, National
Clearing Centre, First
Floor, Free Press House,
Nariman Point, Mumbai – 400
021.
Q.15. What will
happen if credit is not
afforded to the account of
the beneficiary?
Ans : If it is not possible
to afford credit to the
account of the beneficiary
for whatever reason, funds
are returned to the remitter
(originating customer).
Q.16. Can NEFT be
used to transfer funds from
/ to NRI or NRE accounts?
Ans : Yes. NEFT can be used
to transfer funds from or to
a Non-Resident Indian (NRI)
or Non-Resident External (NRE)
accounts in the country.
This, however, is subject to
applicability of provisions
of the Foreign Exchange
Management Act, 2000 (FEMA).
Q.17.
Can inward foreign
remittances be received
through NEFT?
Ans : No. The NEFT system
can be used only for
remitting Indian Rupees
between the participating
bank branches in the
country.
Q.18.
Can remittances abroad be
sent using NEFT?
Ans : No. However, a
facility is available to
send outward remittances to
Nepal under the Indo-Nepal
Remittance Facility Scheme.
Details of this scheme are
available on the website of
Reserve Bank of India at
http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf.
Q.19. What are the
other transactions that
could be initiated using
NEFT?
Ans : The NEFT system can be
used to pay credit card dues
to the card issuing banks. A
separate Transaction Code
(No. 52) has been allotted
in the NEFT system to
facilitate the payment of
credit card dues to member
banks. It is necessary to
quote the IFSC of the
beneficiary card issuing
bank to initiate the bill
payment transactions using
NEFT.
Q.20.
Can a transaction be
originated to receive funds
from another account?
Ans : No. NEFT is a
credit-push system i.e.,
transactions can be
originated only to transfer
funds to a beneficiary.
Q.21. Would the
originator receive an
acknowledgement once the
funds are transferred to the
account of the beneficiary?
Ans : No, this facility is
not available at present.
Efforts are on to give an
alert / message to the
customer once credit is
afforded to the account of
the beneficiary.
Q.22. Is there a way
for the originator to track
a transaction in NEFT?
Ans : Yes, the originating
customer can track the NEFT
transaction through the
originating bank branch. It
is possible for the
originating bank branch to
keep track and be aware of
the status of the NEFT
transaction at all times.
Q.23. What are the
pre-requisites for
originating a NEFT
transaction?
Ans : Following are the
pre-requisites for putting
through a funds transfer
transaction using NEFT –
-
Originating and
destination bank
branches should be part
of the NEFT network
-
Beneficiary details such
as beneficiary name,
account number and
account type
-
Name and IFSC of the
beneficiary bank branch.
For net banking
customers, some banks
provide the facility to
automatically pop-up the
IFSC once name of the
destination bank and
branch is highlighted /
chosen / indicated /
keyed in.
Q.24. What are the
other features of NEFT?
Ans : Launched in October
2005, NEFT is an electronic
payment system that uses a
secure mode of transferring
funds from one bank branch
to another bank branch. NEFT
uses the Public Key
Infrastructure (PKI)
technology to ensure
end-to-end security and
rides on the INdian
FInancial NETwork (INFINET)
to connect the bank branches
for electronic transfer of
funds. The bank
participation, branch
coverage and transaction
volume has been continuously
increasing, which is
reflective of the acceptance
and popularity of the NEFT
system. For further details
about the NEFT system, the
NEFT Procedural Guidelines –
available on the website of
Reserve Bank of India at
http://www.rbi.org.in/scripts/neft.aspx.
– may be referred. |