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.
- On the other hand, in NEFT, transactions received up to a particular time are processed in batches.
- 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.
- In 2019, with an aim to encourage digital transfer of funds, the RBI waived off all charges for transactions using NEFT and RTGS systems.
- The RBI has also allowed round-the-clock transactions of the NEFT and RTGS systems throughout the year on all days, i.e., on a 24x7x365 basis.
Why in News?
- The Real-Time Gross Settlement service was disrupted recently due to technical upgrade of NEFT service, aimed at enhancing its performance and resilience.