The National Electronic Fund Transfer, or NEFT, is one of the most commonly-used ways of transferring money online from one bank account to another. But until now it had a limitation - transfer was not instantaneous.
But that will soon change with the RBI deciding to enhance the payment system and reducing the clearance time. Presently, in NEFT, money is transferred in batches. There are 12 settlements between 8am and 7pm on weekdays and six settlements between 8am and 1pm on Saturdays.
This will now be reduced from hourly batches to half hourly batches, according to the RBI. Newly-appointed Deputy Governor B.P. Kanungo said that the step will improve customer experience.
He explained: "Consequently, 11 additional settlement batches will be introduced at 8.30am onwards, taking the total number of half hourly settlement batches during the day to 23".
According to the RBI, there is no cap on the amount of money that can be transferred. But, individual banks set a limit. State Bank of India, for example, has capped the NEFT transfer amount under retail banking at Rs 10 lakh.
Here's how you can transfer money using NEFT:
- Your bank branch has to be NEFT-enabled. You can check on the Reserve Bank of India's (RBI's) website if it is so.
- Get a net banking login id and password. Also, register your mobile number with the bank.
- Add the details of the beneficiary to whom you want to transfer money. For this, you need the name of the person, his or her account number and 11-digit alpha-numeric IFS (Indian Financial System) code for the bank branch. The IFSC is printed on the cheque leaf. It is also available on the RBI website.
- After adding the beneficiary, you may have to wait for some time before you can transfer money. For instance, in case of ICICI Bank, you can transfer money after half an hour of the addition of the beneficiary. In case of SBI, it is four hours.
- Log in to your net banking account, go to 'Transfer Funds', select the beneficiary (you can add multiple beneficiaries) and transfer money by entering the one-time password that you will get on your mobile phone. 6 The money will be transferred to the beneficiary's account when the next settlement is scheduled.