BankBazaar.com CEO Adhil Shetty explains benefits of switching over to the new-age technology
Remember those long queues that used to irritate you while depositing money into a bank account. The slow procedures and modus operandi of some of your neighborhood public banks tested the nerves. Anxiety that you will have to take another day leave just to deposit the amount tensed you. All this has gone after the evolution of National Electronic Funds Transfer (Neft). Some public sector banks are yet to offer these facilities to the customers,however,due to lack of this facility,they are losing big-ticket customers to private sector banks. Neft is rapidly becoming an ideal platform for inward and outward remittances by the customers compared with cheque. The total volumes under Neft of some private banks are growing at a rate of 5 to 6%.
Demerits of cheque-based transactions
Normally,a cheque carries various issues that are not involved with Neft transaction. In case of a cheque,the clearance is a big issue that degrades its value against the Neft. When there is an emergency,a person can transfer money through Neft and it takes only a few hours for the amount to get credited into the beneficiary account. On other hand,a cheque takes about two working days. The tension of cheque getting bounced due to signature mismatch is another disadvantage. The person has to carry a cheque to the branch where he wants to deposit or withdraw money from. In Neft,he can be anywhere at the time of inward and outward remittance. The charges of cheque book and heavy penalty in case of cheque bounce are saved in Neft.
Who can transfer?
Individuals,firms and corporate can transfer funds electronically from anywhere to any branch and any entity (individuals,firms and corporate) having an account with other banks within the length and breadth of the country. The facilities include transfer of funds in the same bank with a different account elsewhere in the country. The only thing to note is that the other bank to which the funds need to be transferred should be using the facility of Neft. A person having a bank account can transmit funds using Neft; even those who dont have a bank account can transfer funds using Neft. However,in cases where a person doesnt have a bank account is asked for a residential proof,phone number after which he can remit any amount up to a maximum of R50,000 per transaction.
How are funds transferred?
As stated earlier,an individual,firms or corporates can transfer funds through Neft. The essential requirement for transferring funds should be taken care of. First and most important point is that the name of a beneficiary should be available.
The other thing is the account type and its number. It is important to know the account type,whether it is savings or current account? The account number must be properly stated at the time of the transfer because in case of wrong entry,it can get transferred to someone else account. The most important requirement among all is the IFSC code. Indian Financial System Code (IFSC) code is required from the destination bank in which the funds are to be transmitted. The beneficiary can get the IFSC code from the bank branch. Even the person transferring the amount can get it through helpline numbers or website of the bank.
Funds are transferred when the bank in which the account is transferred receives the inward message of remittance from the clearing centre. Fund is credited to the beneficiary account.
Destination banks have the liability to return the transaction in two hours in cases where the amount cannot be transferred to the beneficiary account. The amount will be credited to the remitter in case it cannot be transferred to the beneficiary account. NRE and NRO accounts can also be used to transfer funds through Neft.
Per transaction limit of R50,000 is there for transferring of funds using Neft. The transactions have different timings on week and weekends. During the week Monday to Friday Neft operates in hourly set of 8 am to 7 pm and on weekends,the batch is from 8 am to 1 pm barring Sunday when the Neft is closed.
Major benefits of Neft remittance
The foremost benefit of Neft transaction is that a person doesnt have to send a cheque or carry it himself to the bank for transfer of funds. The transfer of funds is in a more proper and cost-effective manner. The fund transfer merely takes a few hours. What a person wants is safe,secure and easy transactions. Neft addresses all these concerns.