This document provides information about NEFT and RTGS funds transfer systems in India. NEFT is a nationwide funds transfer system that allows electronic transfer of funds between banks across India. Transactions are processed in batches throughout the day. RTGS allows for real-time or instantaneous transfer of funds between banks and has no maximum limit. It is intended for high-value, time-critical payments. Both systems require the remitter and beneficiary to have bank accounts and follow a similar multi-step process involving the remitting bank, centralized clearing center at RBI, and receiving bank.

1. FUNDS TRANSFER –
NEFT & RTGS

2.  NEFT – Nation wide
- Replaced RBI_EFT from 1.4.08
- 82 banks (as 0n 31.12.07)
-34510 branches “
- Centralised a/c maintenance
at NCC of RBI (Mumbai)

3. • The ability of a branch to participate in the
system would depend on it possessing the
required technical infrastructure for using and
participating in the system

4.  STEP 1
 Remitter – NEFT Application – Beneficiary’s name, account
type &No. Bank -branch, IFS code of the beneficiary’s
branch,
 WHAT IS AN IFS CODE?
 Indian Financial System Code to identify the bank and
branch
- 11 digit alphanumeric
- First 4 … relate to Bank
- Fifth …. Control Character ( presently 0)
- Next 6 … branch code

5.  STEP – 2
 Remitting branch prepares an SFMS
( Structured Financial Message Solution)
transmits it to its Service center for NEFT


6. • STEPS 3 & 4
• Service Centre for NEFT sends to NEFT
clearing Centre RBI, at Mumbai
• At NEFT clearing Centre RBI, the SFMS is
included in the next available settlement.
• 6 SETTLEMENTS FOR A DAY.
• On Saturdays 3
• 09.30, 10.30, 12.00, 13.00, 15.00 and
16.00 hrs on weekdays and 09.30, 10.30
and 12.00 hours on Saturdays

7.  STEPS 5 & 6
At the clearing centre RBI
 Sorting of the transactions bank wise
 accounting for net credit or debit –
in participating bank’s accounts.
 transmission of bank wise remittance
messages to the individual banks

8.  STEP 7
 The receiving banks process the RBI
transmittals and provide credits to the
beneficiary’s accounts.
 Service Center may use STPI (Straight
Through Processing Interface) and
upload the SFMS messages to individual
branches.

9.  The beneficiary’s bank account is
credited on the same day or the next day
depending on the time of transmittal and
the RBI settlement time after that
transmittal

10.  GENERAL CONDITIONS:
 The beneficiary bank advises the
beneficiary.
 In case of non-credit, the amount is to
be sent back to the sender bank in the
next settlement itself.
 Non credit to the beneficiary’s account
has to be followed up by the remitter
with his branch.
 He is entitled to get the amount back if
the credit does not happen according to
schedule

11.  Both the remitter and the beneficiary must
have bank accounts to use this facility.
 Remittances in foreign exchange are not
permitted.
 A beneficiary cannot also receive funds from
abroad through NEFT

12.  RTGS is Real Time Gross Settlement. It is a
funds transfer mechanism which works “real
time” and on a “gross settlement” basis
where money transfer takes place between
two banks
 RTGS is the fastest mode of funds transfer
as on date.( Inter-bank transactions)

13.  Real time settlement means that the
payment to the beneficiary is not subject
to any waiting period.
 The transactions are settled as soon as
they are processed.
 In other words instantaneous credit is
afforded to the beneficiary,

14.  Gross settlement means
 On one to one basis
 No netting
 Bank’s a/c credited in RBI instantaneously
 Beneficiary’s a/c is credited within 2 hours
 RBI message to remitter bank
 Message from remitter bank to remitter.

15.  In case of non-credit to beneficiary's a/c
within 2 hours, the destination bank has
to return the money to the remitting
bank within 2 hours.
 At the remitting bank, the debit in the
customer’s a/c is reversed.

16. Working hours of RTGS service window
For Customer service:
9 A.M. To 15 hours (on week days)
9 A.M to 12 noon ( Saturday)
For Inter-bank transactions
9 A.M. to 17.00 hours
9 A.M. to 14 hours.

17. Transaction Amount – Min 1.00 lakh
- Max NO LIMIT.
 26000 BRANCHES (as on 31.01.2008)
 14000 TRANSACTIONS/DAY ( “ )
 1,50,000 Crores ( “)
 Procedure is similar to that of NEFT.
 Valuable for high value time critical
payments
 Payment instructions carry a guarantee of
RBI.