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| Q.1. What is NEFT?
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Ans: National Electronic Funds Transfer (NEFT) is a nation-wide system that
facilitates individuals, firms and corporates to electronically transfer funds
from any bank branch to any individual, firm or corporate having an account
with any other bank branch in the country.
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| Q.2. Are all bank branches in the country part of the NEFT funds
transfer network? |
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Ans: For being part of the NEFT funds transfer network, a bank branch has to be
NEFT-enabled. As at end-September 2010, little over 70,000 branches / offices
of 99 banks in the country (out of around 80,000 bank branches) are
NEFT-enabled. Steps are being taken to further widen the coverage both in terms
of banks and branches / offices.
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| Q.3. How can one know which bank branches are part of the NEFT
network? |
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Ans: The list of bank branches participating in the NEFT system is available on
the website of Reserve Bank of India at
http://www.rbi.org.in/scripts/neft.aspx . Details will also be
available with the banks / branches participating in the NEFT system.
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| Q.4. Who can transfer funds using NEFT? |
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Ans: Individuals, firms or corporates maintaining accounts with a bank branch
can transfer funds using NEFT. Even such individuals, firms or corporates who
do not have a bank account (walk-in customers) can also deposit cash at the
NEFT-enabled branch with instructions to transfer funds using NEFT. A separate
Transaction Code (No. 50) has been allotted in the NEFT system to facilitate
walk-in customers to deposit cash and transfer funds to a beneficiary. Such
customers have to furnish full details including complete address, telephone
number, etc. NEFT, thus, facilitates originators or remitters to initiate funds
transfer transactions even without the need for having a bank account.
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| Q.5. Who can receive funds through the NEFT system? |
Ans: Individuals, firms or corporates maintaining accounts with a bank branch
can receive funds through the NEFT system. It is, therefore, necessary for the
beneficiary to have an account with the NEFT enabled destination bank branch in
the country.
The NEFT system also facilitates one-way cross-border transfer of funds
from India to Nepal. This is known as the Indo-Nepal Remittance Facility
Scheme. A remitter can transfer funds from any of the NEFT-enabled branches in
to Nepal, irrespective of whether the beneficiary in Nepal maintains an account
with a bank branch in Nepal or not. The beneficiary would receive funds in
Nepalese Rupees. A separate Transaction Code (No. 51) has been allotted in the
NEFT system to facilitate the transfer of funds from India to Nepal. Further
details on the Indo-Nepal Remittance Facility Scheme are available on the
website of Reserve Bank of India at http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf..
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| Q.6. Is there any limit on the amount that could be transferred
using NEFT? |
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Ans: No. There is no limit – either minimum or maximum – on the amount of funds
that could be transferred using NEFT. However, for walk-in customers mentioned
at Q.4 and Q.5 above, including those remitting funds under the Indo-Nepal
Remittance Facility Scheme, the maximum amount that could be transferred is Rs.
49,999.
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| Q.7. Whether the system is centre specific or has any
geographical restriction? |
Ans: No. There is no restriction of centres or of any geographical area within
the country. The NEFT system takes advantage of the centralised accounting
system in banks. For the purpose, the account of a bank that is originating or
receiving funds transfer instructions through NEFT is operated centrally at
Mumbai. The branches participating in NEFT can, however, be located anywhere
across the length and breadth of the country.
To facilitate operation of the Indo-Nepal Remittance Facility Scheme, the NEFT
system also extends to branches of banks in Nepal (as detailed at Q.5 above).
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| Q.8. What are the operating hours of NEFT? |
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Ans: Presently, NEFT operates in hourly batches - there are eleven settlements
from 9 am to 7 pm on week days and five settlements from 9 am to 1 pm on
Saturdays.
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| Q.9. How does the NEFT system operate? |
Step-1: An individual / firm / corporate intending to originate transfer of
funds through NEFT has to fill an application form providing details of the
beneficiary (like, name of the beneficiary, name of the bank branch where the
beneficiary has an account, IFSC of the beneficiary bank branch, account type
and account number). The application form will be available at the originating
bank branch. The remitter authorizes his/her bank branch to debit his account
and remit the specified amount to the beneficiary. Customers enjoying net
banking facility offered by their bankers can initiate the funds transfer
request online. Some banks offer the NEFT facility even through the ATMs.
Walk-in customers will, however, have to give their contact details (complete
address and telephone number, etc.) to the branch. This will help the branch to
refund the money to the customer in case credit could not be afforded to the
beneficiary’s bank account or the transaction is rejected / returned for any
reason.
Step-2: The originating bank branch prepares a message and sends the message to
its pooling centre (also called the NEFT Service Centre).
Step-3: The pooling centre forwards the message to the NEFT Clearing Centre
(operated by National Clearing Cell, Reserve Bank of India, Mumbai) to be
included for the next available batch.
Step-4: The Clearing Centre sorts the funds transfer transactions destination
bank-wise and prepares accounting entries to receive funds from (debit) the
originating banks and give the funds
to (credit) the destination banks. Thereafter, bank-wise remittance messages
are forwarded to the destination banks through their pooling centre (NEFT
Service Centre).
Step-5: The destination banks receive the inward remittance messages from the
Clearing Centre and pass on the credit to the beneficiary accounts.
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| Q.10. What is IFSC? |
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Ans: IFSC or Indian Financial System Code is an alpha-numeric code that
uniquely identifies a bank-branch participating in the NEFT system. This is a
11 digit code with the first 4 alpha characters representing the bank, and the
last 6 numeric characters representing the branch. The 5th character is 0
(zero). IFSC is used by the NEFT system to route the messages to the
destination banks / branches.
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| Q.11. How can the IFSC of a bank-branch be found? |
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Ans: Bank-wise list of IFSCs is available with all the bank-branches
participating in NEFT. List of bank-branches participating in NEFT and their
IFSCs is available on the website of Reserve Bank of India at
http://www.rbi.org.in/scripts/neft.aspx . All the banks have also been
advised to print the IFSC of the branch on cheques issued by branches to their
customers. For net banking customers many banks have enabled online search /
pop-up of the IFSC of the destination bank branch.
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| Q.12. What are the processing or service charges for NEFT
transactions? |
Ans: Reserve Bank of India has waived the processing or service charges for
member banks till March 31, 2011. Accordingly, member banks participating in
NEFT need not pay any processing or service charges to Reserve Bank of India.
Further, processing or service charges to be levied by the member banks from
their customers have also been rationalised by Reserve Bank of India as under:
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a) Inward transactions at destination bank branches (for credit to beneficiary
accounts)
– Free, no charges to be levied from beneficiaries
b) Outward transactions at originating bank branches (charges for the remitter)
– For transactions up to `. 1 lakh – not exceeding `. 5 (+ Service Tax)
– For transactions of `. 1 lakh & above – not exceeding `. 25 (+ Service Tax).
Note: Charges applicable for transferring funds from India to Nepal using the
NEFT system (under the Indo-Nepal Remittance Facility Scheme), are as under –
a) Originating bank branch in India – Maximum `. 5 (+ Service Tax) per
transaction.
b) State Bank of India in India – `. 20 (+ Service Tax) per transaction if the
beneficiary maintains an account with Nepal SBI Ltd. (NSBL).
c) State Bank of India shares this amount equally with NSBL. NSBL would not
charge any additional amount for crediting the account of the beneficiary.
d) In case the beneficiary does not maintain an account with NSBL, an
additional amount would be charged @ `. 50 (+ Service Tax) for remittances up
to ` 5,000 and `. 75 (+ Service Tax) for remittances above `. 5,000.
The charges for the Indo-Nepal Remittance Facility Scheme would, thus, be a
minimum of ` 25 (+ Service Tax) or a maximum of `. 100 (+ Service Tax)
depending on the value of transaction and the manner in which credit is
afforded to the beneficiary.
Originating bank branches have been advised to recover the entire charges from
the remitter as per the structure detailed above and pass on the appropriate
amount to SBI after retaining their share (of `. 5 + Service Tax).
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| Q.13. When can the beneficiary expect to get the credit to his
bank account? |
Ans: The beneficiary can expect to get credit for the first nine batches on
week days (i.e., transactions from 9 am to 5 pm) and the first four batches on
Saturdays (i.e., transactions from 9 am to 12 noon) on the same day. For
transactions settled in the last two batches on week days (i.e., transactions
settled in the 6 and 7 pm batches) and the last batch on Saturdays (i.e.,
transactions handled in the 1 pm batch) beneficiaries can expect to get credit
either on the same day or on the next working day morning (depending on the
type of facility enjoyed by the beneficiary with his bank).
The timelines for remittances to Nepal using the NEFT system (under the
Indo-Nepal Remittance Facility Scheme) are detailed separately at
http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf.
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| Q.14. Who should be contacted in case of non-credit or delay in
credit to the beneficiary account? |
Ans: In case of non-credit or delay in credit to the beneficiary account, the
NEFT Customer Facilitation Centre (CFC) of the respective bank can be contacted
(the remitter can contact his bank’s CFC; the beneficiary may contact the CFC
of his bank). Details of NEFT Customer Facilitation Centres of banks are
available on the websites of the respective banks. The details are also
available on the website of Reserve Bank of India at
http://www.rbi.org.in/scripts/neft.aspx.
If the issue is not resolved satisfactorily, the NEFT Help Desk (or Customer
Facilitation Centre of Reserve Bank of India) at National Clearing Cell,
Reserve Bank of India, Mumbai may be contacted through e-mail at
nefthelpdeskncc@rbi.org.in or by addressing correspondence to the General
Manager, Reserve Bank of India, National Clearing Centre, First Floor, Free
Press House, Nariman Point, Mumbai – 400 021.
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| Q.15. What will happen if credit is not afforded to the account
of the beneficiary? |
Ans: If it is not possible to afford credit to the account of the beneficiary
for whatever reason, destination banks are required to return the transaction
(to the originating branch) within two hours of completion of the batch in
which the transaction was processed.
For example, if a customer submits a fund transfer request at 12.05 p.m. to a
NEFT-enabled branch, the branch in turn forwards the message through its
pooling centre to the NEFT Clearing Centre for processing in the immediately
available batch which (say) is the 1.00 pm batch. The destination bank, if is
unable to afford the credit to the beneficiary for any reason, has to return
the transaction to the originating bank, not later than in the 3.00 pm batch.
The originating branch is expected to afford credit to the originating
customer, maybe within the next 30 minutes, (say) by 3.30 pm. To conclude, for
all uncredited transactions, customers can reasonably expect the funds to be
received back by them in around 3 to 4 hours time.
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| Q.16. Can NEFT be used to transfer funds from / to NRE and NRO
accounts? |
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Ans: Yes. NEFT can be used to transfer funds from or to NRE and NRO accounts in
the country. This, however, is subject to the adherence of the provisions of
the Foreign Exchange Management Act, 2000 (FEMA).
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| Q.17. Can inward foreign remittances be received through NEFT? |
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Ans: No. The NEFT system can be used only for remitting Indian Rupees between
the participating bank branches in the country.
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| Q.18. Can remittances abroad be sent using NEFT? |
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Ans: No. However, a facility is available to send outward remittances to Nepal
under the Indo- Nepal Remittance Facility Scheme. Details of this scheme are
available on the website of Reserve Bank of India at
http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf.
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| Q.19. What are the other transactions that could be initiated
using NEFT? |
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Ans: The NEFT system can be used to pay credit card dues to the card issuing
banks. A separate Transaction Code (No. 52) has been allotted in the NEFT
system to facilitate the payment of credit card dues to card issuing banks. It
is necessary to quote the IFSC of the beneficiary card issuing bank to initiate
the bill payment transactions using NEFT.
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| Q.20. Can a transaction be originated to draw (receive) funds
from another account? |
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Ans: No. NEFT is a credit-push system i.e., transactions can be originated only
to transfer funds to a beneficiary.
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| Q.21. Would the remitter receive an acknowledgement once the
funds are transferred to the account of the beneficiary? |
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Ans: Yes. In case of successful credit to the beneficiary's account, the bank
which had originated the transaction is expected to send a confirmation to the
originating customer (through SMS or email) advising of the credit as also
mentioning the date and time of credit. For the purpose, remitters need to
provide their mobile number / e-mail-id to the branch at the time of
originating the transaction.
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| Q.22. Is there a way for the remitter to track a transaction in
NEFT |
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Ans: Yes, the remitter can track the NEFT transaction through the originating
bank branch. It is possible for the originating bank branch to keep track and
be aware of the status of the NEFT transaction at all times.
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| Q.23. What are the pre-requisites for originating a NEFT
transaction? |
Ans: Following are the pre-requisites for putting through a funds transfer
transaction using NEFT –
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Originating and destination bank branches should be part of the NEFT network
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Beneficiary details such as beneficiary name, account number and account type
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Name and IFSC of the beneficiary bank branch. For net banking customers, some
banks provide the facility to automatically pop-up the IFSC once name of the
destination bank and branch is highlighted / chosen / indicated / keyed in.
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| Q.24. What are the other features of NEFT? |
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Ans: Launched in October 2005, NEFT is an electronic payment system that uses a
secure mode of transferring funds from one bank branch to another bank branch.
NEFT uses the Public Key Infrastructure (PKI) technology to ensure end-to-end
security and rides on the INdian FInancial NETwork (INFINET) to connect the
bank branches for electronic transfer of funds. The participating banks, branch
coverage and transaction volumes have been continuously increasing, which is
reflective of the acceptance and popularity of the NEFT system. For further
details about the NEFT system and the NEFT Procedural Guidelines – available on
the website of Reserve Bank of India at
http://www.rbi.org.in/scripts/neft.aspx . – may also be referred.
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