6 Important FAQs on RTGS & NEFT – Part 1

6 Important FAQs on RTGS & NEFT – Part 1

 

RTGS (Real Time Gross Settlement) and NEFT (National Electronic Fund Transfer) is electronic mode of payment system in banking industry. These modes of payment allow individuals, companies and firms to transfer funds from one bank to another. These facilities can only be used for transferring money with in the country.

6 Important FAQs on RTGS & NEFT:

  1. What is interbank transfer?

Inter Bank transfer is a special service that allows you to transfer funds electronically to the account in other banks in India.

  1. What is NEFT?

The acronym NEFT stands for “National Electronic Funds Transfer”. It is a nation-wide payment system, which is facilitating the one-to-one electronic fund transfer. By using this payment system, individuals, firms, and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country.

  1. What is RTGS system?

The acronym ‘RTGS’ stands for “Real Time Gross Settlement”. Here real time means processing of instructions at the time they are received rather than at some later time, and ‘Gross Settlement’ means the settlement of funds transfer instructions occurs individually.

The funds settlement takes place in the books of the Reserve Bank of India, the payments done through RTGS are final and irrevocable.

  1. How RTGS and NEFT are different?

There are significant differences between NEFT and RTGS as following:

  • NEFT is an electronic fund transfer system that operates on a Differed Net Settlement basis, which settles transaction in batches.
  • The settlement takes place with all the transactions received till the particular cut-off time.
  • NEFT operates in hourly basis.
  • Whereas RTGS operates on a real time basis and transactions are settled individually.
  • RTGS transactions are processed continuously throughout the RTGS business hour.
  1. What is the limit on the amount that could be transferred using NEFT & RTGS?

For “NEFT” – there is no limit either maximum or minimum on the amount that could be transferred using NEFT. But, maximum amount per transaction is limited to Rs. 50, 000/- for cash based remittances with in India.

For “RTGS” – the RTGS system is primarily meant for large value transactions. The minimum amount can be transferred through RTGS is Rs. 2 lakh. There is no upper limit for RTGS transactions.

  1. What are the operating hours of RTGS and NEFT services?

NEFT Transactions are sent to RBI based on the following schedule:

Day Start Time End Time
Monday to Friday (Week days) 08:00 am 07:00 pm
Saturdays 08:00 am 01:00 pm

NEFT operates in hourly batches – there are twelve settlements from 08:00 am to 07:00 pm on week days (Monday to Friday) and six settlements from 08:00 am to 01:00 pm.

RTGS Transactions are sent to RBI based on the following schedule:

Day Start Time End Time
Monday to Friday (Week days) 09:00 am 04:30 pm
Saturdays 09:00 am 02:00 pm

 

These timings are for settlement at the RBI end, but the timings that the banks follow may vary, depending on the customer timings of the bank branches.

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