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.[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, fund transfers through the NEFT system do not occur in real-time basis. NEFT settles fund transfers in hourly batches with 23 settlements occurring between 00:30 hrs. to 00:00 hrs.

From 16 December 2019, there would be 48 half-hourly batches occurring between 00.30 am to 00:00 am every day regardless of a holiday or otherwise,[2]

As of 30 November 2019, NEFT facilities were available at 1,48,477 branches/offices of 216 banks across the country 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.[citation needed]

There is no limit – either minimum or maximum – on the amount of funds that can be transferred using NEFT.[3]


Detailed process of NEFT is as follows:[4][5]

  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 every day between 00:30 am and 00:00 am all through the year.

NEFT originally settled fund transfers in hourly batches.[6] The RBI reduced clearance times to half-hourly batches in April 2016.[7] In August 2019, the RBI announced that it would enable round-the-clock settlements from 16 December 2019.[8][9]

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):

  • Free, the RBI announced on 11 June 2019 that all charges for NEFT and real-time gross settlement collected from banks would be waived from 1 July 2019, and asked banks to pass on the benefits to customers.[10]


216.71 million National Electronic Funds Transfers transactions worth 1,811,780.90 crore (US$254.01 billion)[11] were made in September 2019, as against 661 million transactions worth 44 trillion (US$620 billion) the entire year 2013-15.[12]


  1. ^ "Overview of Payment Systems in India". Reserve Bank of India. Retrieved 24 January 2015.
  2. ^ "Reserve Bank of India - Notifications". Retrieved 11 December 2019.
  3. ^ "Reserve Bank of India". Retrieved 11 December 2019.
  4. ^ "FAQ- NEFT System". Reserve Bank of India. Retrieved 23 May 2016.
  5. ^ "National Electronic Funds Transfer System - Procedural Guidelines". Reserve Bank of India. Retrieved 24 January 2015.
  6. ^ "NEFT Fund Transfer To Get Faster - NDTV". NDTV. Retrieved 6 April 2017.
  7. ^ "NEFT transfer to get quicker as RBI cuts clearance time". The Indian Express. 6 April 2016. Retrieved 6 April 2017.
  8. ^ Manikandan, Ashwin (7 August 2019). "Transact round the clock: NEFT timings to change from December, RBI announces". The Economic Times. Retrieved 7 August 2019.
  9. ^ "RBI allows round-the-clock fund transfers under NEFT from December". The Hindu. 7 August 2019. Retrieved 7 August 2019.
  10. ^ "Fund transfers via RTGS, NEFT to cost less from July 1". The Times of India.
  11. ^ "ECS - All Centres' Transaction Details for the month of August 2019" (PDF). RBI. Archived (PDF) from the original on 12 December 2019. Retrieved 12 December 2019.
  12. ^ "Digital India: Beyond an aspiration to an imperative", Business Today, 26 February 2016

External links[edit]