National Electronic Funds Transfer (NEFT) 

Source-This post on National Electronic Funds Transfer (NEFT) is based on the article “NEFT records 4.1 cr transactions on Feb 29, highest single-day volume” published in “Economic Times” on 1st March 2024.

Why in the News?

National Electronic Funds Transfer (NEFT) reported its highest-ever daily number of transactions at 4.10 crore on February 29, 2024.

About National Electronic Funds Transfer (NEFT)

1. National Electronic Funds Transfer (NEFT) is a nationwide payment system that facilitates convenient one-to-one electronic fund transfers.

2. Under this scheme, individuals, firms, and corporations can electronically transfer funds from their accounts in any bank branch to the account of another individual, firm, or corporate located in any other bank branch within the country.

3. The NEFT system is available round the clock throughout the year on all days.

4. Transaction Limit: There is no minimum or maximum limit for the amount of money that can be transferred using NEFT.

a. A person who does not have a bank account can also remit funds through NEFT to a beneficiary having a bank account, with another NEFT member bank. It can be done by depositing cash at the nearest NEFT enabled branch of any bank. Such cash remittances will, however, be restricted to a maximum of ₹50,000 per transaction.

b. However, for cash-based remittances within India and under the India-Nepal Remittance Facility, the maximum amount per transaction is restricted to ₹50,000/-.

7. Difference between NEFT and RTGS: Real-Time Gross Settlement (RTGS) operates on a continuous and real-time basis for individual transactions. NEFT transactions occur in batches, so there might be a slight delay for actual transfers.

UPSC Syllabus: Economy