NEFT stands for National Electronic Funds Transfer (NEFT full form). It is an electronic fund transfer system as money can be transferred from one bank to another, it was initiated and introduced by Reserve Bank of India on November 2005. A bank should be NEFT enabled in order to be eligible for the use of NEFT transfers. The whole process of NEFT is carried via electronic messages. The settlement of NEFT fund transfer is done in hourly batches.
There is a specific process that is followed for using NEFT services:-
- The customer has to fill an application form stating all the necessary details like name, bank, branch name, IFSC, account type and account number of the recipient along with the amount that needs to be transferred to the recipient.
- The originating branch then prepares a message and send it to the NEFT service center.
- The NEFT service center transfers the message to the NEFT clearing center which is operated by national clearing cell, RBI, Mumbai.
- The clearing center then transfers the transactions to the destination bank-wise and prepare accounting entries about the same.
- The destination banks receive the remittance message from the NEFT clearing center and credit the respective amount in the recipient account.
NEFT transfers are done in half-hourly batches between 8 A.M to 7 P.M from Monday to Saturday(excluding the second and fourth Saturday of every month). No transaction takes place on public and bank holidays(second and fourth Saturday are declared as bank holidays for the whole calendar year). If the NEFT transaction has been initiated and there is an immediate holiday in that case transaction will be settled in the next available slot.
One of the cornerstones of NEFT transfers is that it does not have any limits as the minimum amount that can be transferred is Rs 1 and there is no maximum limit imposed by RBI on NEFT transactions, however, some limitations may be imposed by the banks with whom you are holding your accounts with.
For eg:-If you hold an account with HDFC then the maximum limit is Rs 25 lakhs per day with per customer ID via NEFT transfers and there is a limit of Rs 50000 if you transfer via cash.
Difference Between NEFT and RTGS
|Minimum Transfer value||The minimum limit is Rs 1||The minimum amount that can be transferred id Rs 2 Lakhs.|
|Maximum Transfer Value||No limit on the maximum amount||No limit on the maximum amount|
|Timings||Starts from 8 AM-7PM(Except on 2nd and 4th Saturday)||Starts from 8 AM-6 PM on working days|
|Payment Mode||Online and Offline||Online and Offline|
|Settlement Basis||Half hourly basis||Real-Time|
|Up to 10000:- ₹2.50
1 Lakh-2 Lakh:-₹15
More than 2 Lakhs:-₹25
|2 Lakh- 5 Lakhs-:-₹25-30
More than 5 Lakhs:- ₹50-55
|Suitable for||Small value Transactions||High-Value transaction|
NEFT Full Form & other details
We hope you got a clear understanding of NEFT Full Form and everything related to it by reading this article.