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 enables 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 24×7 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.

As of January 2011, NEFT facilities were available at 74,680 branches offices of 101 banks across the country (out of around 82,400 bank branches), and online through the website of NEFT-enabled banks. NEFT has gained popularity due to the ease and efficiency with which the transactions can be concluded. This is reflected from the fact that 42% of all electronic transactions in the 2008 financial year were NEFT transactions.


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

  1. The 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 also offer the NEFT facility through 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.

Settlement timings[edit]

NEFT transfers are settled in half-hourly batches in 24×7. Any transaction initiated after a designated settlement time would be completed at the next available settlement time.

NEFT originally settled fund transfers in hourly batches.[4] The RBI reduced clearance times to half-hourly batches in April 2016.[5] In August 2019, the RBI announced that it would enable round-the-clock settlements from December 2019.[6][7]

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) : 5.00 (+ GST)
  • For transactions above 1 lakh and up to 2 lakhs (not exceeding) : 15.00 (+ GST)
  • For transactions above 2 lakhs : 25.00 (+ GST)

Charges waived[edit]

The RBI announced on 11 June 2019 that all charges for via NEFT and RTGS collected from banks would be waived from 1 July 2019, and asked banks to pass on the benefits to customers.[8]


928 million National Electronic Funds Transfers (NEFT) transactions worth 60 trillion (US$870 billion) were made in 2014-15 as against 661 million transactions worth 44 trillion (US$640 billion) the previous year.[9]


  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. ^ Manikandan, Ashwin (7 August 2019). "Transact round the clock: NEFT timings to change from December, RBI announces". The Economic Times. Retrieved 7 August 2019.
  7. ^ "RBI allows round-the-clock fund transfers under NEFT from December". The Hindu. 7 August 2019. Retrieved 7 August 2019.
  8. ^ "Fund transfers via RTGS, NEFT to cost less from July 1 - Times of India". The Times of India. Retrieved 11 June 2019.
  9. ^ "Digital India: Beyond an aspiration to an imperative", Business Today, 26 February 2016

External links[edit]