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Sunday, December 15, 2019

Explained: How NEFT works, why RBI has suggested 24×7 money transfer

If RBI makes NEFT 24x7, it will not only ease the fund transfer for customers round the clock but will also take some load-off the bank branches for executing such transactions.

, Edited by Explained Desk | New Delhi | Updated: May 16, 2019 4:02:32 pm
Explained: How NEFT works, why RBI has suggested 24×7 money transfer The Reserve Bank of India office in Mumbai The central bank has proposed extending the availability of NEFT round-the-clock. (Express Photo: Pradip Das)

In a move that may ease the online fund transfer for customers beyond banking hours, the Reserve Bank of India has in its vision document 2019-21 on Payment and Settlement Systems in India proposed the possibility of extending the availability of National Electronic Funds Transfer (NEFT) round-the-clock, i.e., 24 hours, seven days a week.

Besides, the central bank will also examine the possibility of extending the timings for Real Time Gross Settlement (RTGS) transactions.

What are the current limits?

Customers can transfer anywhere between Rs 1 and Rs 25 lakh via NEFT (for HDFC Bank; varies from bank to bank) through net banking in a day. Through RTGS, they can transfer between Rs 2 lakh and Rs 25 lakh through net banking in a day. However, as of now, these online transactions are not available on Sundays, on the second and fourth Saturdays of every month and on bank holidays.

On working days, NEFT is available between 8 am and 7 pm (varies from bank to bank) except on working Saturdays (8 am and 1 pm) and hence they restrict customers’ ability to carry out such transactions.

Online RTGS transactions are available for lesser hours. It can be done till 4 pm (varies from bank to bank).

What are the options currently available?

Customers can currently transfer money through Immediate Payment Service (IMPS) round the clock but the maximum amount allowed is Rs 2 lakh. If RBI makes NEFT 24×7, it will not only ease the fund transfer for customers round the clock but will also take some load-off the bank branches for executing such transactions.

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