NEFT (National Electronic Funds Transfer) is a system of interbank electronic transfer of funds in India. This system enables individuals, firms, and corporates to transfer money from one bank account to another bank account, electronically, through a network of banks and financial institutions.
NEFT was introduced by the Reserve Bank of India (RBI) in 2005, as a means of providing a convenient and efficient alternative to traditional methods of money transfer, such as cheques and drafts. The NEFT system operates on a deferred net settlement (DNS) basis, which means that all transactions are settled in batches, rather than individually in real-time. This helps to reduce the operational costs and increase the efficiency of the system.
The NEFT system operates on a half-hourly basis, with 12 settlements per day, Monday to Saturday. On Sundays and bank holidays, the system is closed. The NEFT system is available for customers 24 hours a day, but the cut-off time for processing a transaction is 7 PM on a working day. Transactions initiated after this cut-off time will be processed on the next working day.
To use the NEFT system, an individual or organization must have a bank account with a bank that is a member of the NEFT network. The customer can initiate a transfer by visiting a branch of their bank or by using the bank’s online banking facility. The customer is required to provide the following information to initiate a transfer: