One of the banking feature that we regularly use is FUND TRANSFER or MONEY TRANSFER. You might have frequently used NEFT (National Electronic Fund Transfer) and/or RTGS (Real Time Gross Settlement) to send monies. Both RTGS and NEFT are schemes started by RBI for the benefit of the customers which allow accounts holders to electronically transfer the funds intra-bank.
What is NEFT?
NEFT is a type of fund transfer which happens between two banks on net settlement basis.If you book a money transfer under NEFT, it is not settled or processed immediately. The settlement happens in batches on an hourly basis. The settlement takes place with all transactions received till the particular cut-off time. The beneficiary (payee) generally receive the credit within 1 or 2 hours.
The minimum limit is One Rupee and there is no maximum limit for transferring funds (some banks may have restriction at transaction level). NEFT services are available from 8:00 am to 6:30 pm on weekdays (Monday – Friday) and from 8:00 am – 12:30 pm on Saturday.
What is RTGS?
It is the fastest way to transfer money electronically. Under RTGS, the money transfer transactions are settled individually and instantly. The beneficiary (payee) generally receive the credit real time (within few minutes). Under RTGS, the transaction initiated after a designated settlement time would have to wait till the next designated settlement time. Contrary to this, in the RTGS transactions are processed continuously throughout the RTGS business hours.
RTGS is generally used for high value transactions. The minimum transaction limit is Rs 2 Lakh and there is no maximum transaction limit.
Currently RTGS services are available from 9:00am to 4:30am on weekdays and from 9:00am to 2:00pm on Saturdays.
There has been a market demand to increase the time limit of RTGS. RBI has decided to extend the RTGS time window. RTGS time window will be modified as under with effect from December 29, 2014
New Time Limits for RTGS
RBI has decided to advance RTGS business hours to 8:00 AM from 9.00 AM and extend closing time of RTGS to 8:00 PM on week days. RTGS business window will be open from 8.00 AM to 3:30 PM on Saturdays.
“RBI Notification on extension of RTGS time limit” (Image courtesy of hin255 at FreeDigitalPhotos.net)