National Electronic Fund Transfer (NEFT)

• • NEFT is a nation-wide centralised payment system owned and operated by the Reserve Bank of India.

• It facilitates funds transfers from one bank account to another. One can access this service either by using Internet banking or by visiting the bank branch. 

• Once we initiate the transfer, the money reaches the beneficiary account within hours. 
• There is no limit on the minimum or maximum amount one can transfer, however, individual banks may put restrictions on a per transaction amount. 

Real Time Gross Settlement (RTGS)

• RTGS is a system where there is continuous and real-time settlement of fund-transfers. 
• ‘Real Time’ means the processing of instructions at the time they are received; ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs individually.
• The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is ₹ 2,00,000/- with no upper or maximum ceiling. 

RBI’s measures

• Last year, with an aim to encourage digital transfer of funds, the RBI waived off all charges for transactions using NEFT and RTGS systems.
• In 2019, the RBI also allowed round-the-clock transactions of the NEFT throughout the year on all days, i.e., on a 24x7x365 basis.  

Why in News?

• Just within a year of operationalising NEFT 24×7, the Reserve Bank has announced that the Real Time Gross Settlement System facility will now be available for round the clock transactions.
• It will provide extended flexibility to businesses for effecting payments. The system can also be leveraged to enhance operations of Indian financial markets and cross-border payments.

Reference:

1. http://newsonair.com/News?title=RTGS-to-be-available-24×7-from-December-14%2c-says-RBI&id=405875