National Electronic Funds Transfer

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National Electronic Funds Transfer (NEFT) is an electronic funds transfer system maintained by the Reserve Bank of India (RBI). Started in November 2005, the setup was established and maintained by Institute for Development and Research in Banking Technology (IDRBT).[1] NEFT is a facility enabling bank customers in India to transfer funds between any two NEFT-enabled bank accounts on a one-to-one basis. It is done via electronic messages. Unlike Real-time gross settlement (RTGS), fund transfers through the NEFT system do not occur in real-time basis. NEFT settles fund transfers in half-hourly batches with 23 settlements occurring between 8:00 AM and 7:30 PM on week days and the 1st, 3rd and 5th Saturday of the calendar month. Transfers initiated outside this time period are settled at the next available window. No settlements are made on the second and fourth Saturday of the month, or on Sundays, or on public holidays.

NEFT facilities are available at 74,680 branches offices of 101 banks across the country (out of around 82,400 bank branches) as of January 2011, and well as online through the website of NEFT-enabled banks and work on a batch mode. NEFT has gained popularity due to its saving on time and the ease with which the transactions can be concluded, This reflects from the fact that 42% of all electronic transactions in the 2008 financial year were NEFT transactions.


Detailed process NEFT is as follows[2][3]

  1. Customer fills an application form providing details of the beneficiary (like name, bank, branch name, IFSC, account type and account number) and the amount to be remitted. The remitter authorizes his/her bank branch to debit his account and remit the specified amount to the beneficiary. This facility is also available through online banking and some banks offer the NEFT facility even through the ATMs.
  2. The originating bank branch prepares a message and sends the message to its pooling centre (also called the NEFT Service Centre).
  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.
  4. The Clearing Centre sorts the funds transfer transactions destination bank-wise and prepares accounting entries to receive funds from the originating banks (debit) and give the funds to the destination banks(credit). Thereafter, bank-wise remittance messages are forwarded to the destination banks through their pooling centre (NEFT Service Centre).
  5. The destination banks receive the inward remittance messages from the Clearing Centre and pass on the credit to the beneficiary customers’ accounts.national electronic

Settlement Timings[edit]

NEFT originally settled fund transfers in hourly batches with twelve settlements between 8:00 AM and 7:00 PM on week days. Settlements are closed on the second and fourth Saturday of the month.[4] In April 2016, the RBI announced that clearance times would be reduced to half-hourly batches raising the number of settlements per day to 23.[5]

Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time. As of 2013, all transactions initiated before 5 PM will be settled on same day. No transactions are settled on weekly holidays and public holidays.

Transaction Timings for NEFT, Monday to Saturday (Except 2nd and 4th Saturday) is 8:00 AM to 6:30 PM. RTGS / NEFT is not allowed on Sundays, second and fourth Saturday of the month and the declared bank holidays for the calendar year.

Service Charges for NEFT Transactions[edit]

The structure of charges is as follows:

Inward transactions at destination bank branches (for credit to beneficiary accounts):

  • Free, no charges to be collected from beneficiaries

Outward transactions at originating bank branches (charges for the remitter):

  • For transactions up to 10,000 (not exceeding) : 2.50 (+ GST)
  • For transactions above 10,000 up to 1 lakh (not exceeding) : 5 (+ GST)
  • For transactions above 1 lakh and up to 2 lakhs (not exceeding) : 15 (+ GST)
  • For transactions above 2 lakhs : 25 (+ GST)


928 million National Electronic Funds Transfers (NEFT) transactions worth 60 trillion (US$830 billion) were made in 2014-15 as against 661 million transactions worth 44 trillion (US$610 billion) the previous year.[6]


  1. ^ "Overview of Payment Systems in India". Reserve Bank of India. Retrieved 24 January 2015.
  2. ^ "FAQ- NEFT System". Reserve Bank of India. Retrieved 23 May 2016.
  3. ^ "National Electronic Funds Transfer System - Procedural Guidelines". Reserve Bank of India. Retrieved 24 January 2015.
  4. ^ "NEFT Fund Transfer To Get Faster - NDTV". NDTV. Retrieved 6 April 2017.
  5. ^ "NEFT transfer to get quicker as RBI cuts clearance time". The Indian Express. 6 April 2016. Retrieved 6 April 2017.
  6. ^ "Digital India: Beyond an aspiration to an imperative", Business Today, 26 February 2016

External links[edit]