National Electronic Fund Transfer (NEFT) or NEFT is an online fund transfer platform launched by the NPCI. It is one of the fastest, most secure modes of inter and intra bank fund transfers. With NEFT, you can efficiently send money at zero to nominal costs, depending on whether you opt for online or offline transfers. You merely need the beneficiary’s bank account details and contact number to send money via internet and mobile banking platforms.

NEFT Settlements – Time Taken

one of the most significant features is the NEFT settlement time taken for beneficiaries to receive money. Firstly, senders and receivers do not have to worry about any specific hours to initiate transactions. You can send money via NEFT 24x7x365. As such, there are no restrictions on timings and there is no need to worry about initiating transactions during banking hours, weekends, or public/bank holidays. Whether you wish to send money to friends and family or pay your bills and Credit Card dues via NEFT, you can so at all hours.

NEFT Settlements – How They Work

suppose you want to transfer funds from your BABA Bank account to another bank account in a different bank, let us say DADA Bank. Here is how the NEFT settlement process works.

Step 1: Initiation

you initiate the NEFT transfer through BABA Bank’s Net Banking platform. You provide the necessary information, including the transfer amount, the beneficiary’s bank name (DADA Bank), branch name, account number, the Indian Financial System Code (IFSC code) of the DADA Bank branch and the beneficiary’s contact number.

Step 2: Batch Processing

NEFT settlements take place in half-hourly batches throughout the day. Once you have initiated the transaction, it takes up to 30 minutes for your transaction to be included in the next available batch based on the time you initiated the transfer.

Step 3: Batch Submission

BABA Bank submits the batch containing your NEFT transaction to the Reserve Bank of India (RBI). The batch also comprises multiple transactions from different customers.

Step 4: RBI Processing

The RBI receives the batch from BABA Bank and processes it after verifying the submitted details of each transaction, including the beneficiary’s bank and account information. It then transfers the funds from the BABA Bank account to the DADA Bank account.

Step 5: Confirmation

once the fund transfer is successfully completed, the sender and beneficiary receive a confirmation notification from their respective banks stating that the funds have been transferred.

NEFT Transfer Time Taken

while the above-mentioned NEFT process may appear complex at face value, the total time taken typically does not exceed 30 minutes to one hour. However, if you are initiating an NEFT transaction for the first time, the time taken for NEFT transfer may be up to 2 hours as the RBI takes up to 30 minutes to verify beneficiary accounts.

You can initiate the transaction only 30 minutes after your beneficiary’s account details have been set-up. Also, once you set up a beneficiary's account, you do not have to undergo the process again. The next time you send money through this payment method, the time taken for NEFT transfers will be reduced and the beneficiary shall receive the funds within 30 minutes to an hour.

Eligibility for an NEFT Transaction

Individuals, firms and corporate must fulfill the following requirements to send money via NEFT.

 

Remitter Bank Account: The remitter must have a bank account with any member bank participating in the NEFT system.

 

Beneficiary's Bank Account: The beneficiary (i.e., the individual entity receiving the funds) should also have an account with any bank in the country participating in the NEFT system.

 

Account Verification: The remitter's bank account must be verified for online or mobile banking-based NEFT transactions.

 

Beneficiary Identification: The remitter must provide accurate details of the beneficiary, including their name, bank and branch name, account type, account number and IFSC Code.

 

Note: While it is necessary for beneficiaries to hold a bank account to receive funds via NEFT, the same is not required of the sender. The sender can merely visit any bank providing NEFT services and request to initiate a transfer by depositing cash. Such transactions are deemed as offline transactions and capped at ₹50,000 per transaction.

 

Synopsis:-

NEFT (National Electronic Fund Transfer) is a secure and fast mode of interbank and intra bank fund transfer available 24x7.

The NEFT process involves initiation, batch processing, RBI verification, and final confirmation to complete the transfer.

Offline NEFT transfers are possible by depositing cash, but such transactions are limited to ₹50,000 per transaction.