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Inter bank money transfer using NEFT and RTGS in India: The Essentials | Ratekhoj.com, Best Fixed Deposits, Loans, Insurance Rates and Credit Cards


Many of us have sent money to family members living in other parts of India through cheques, DDs, money orders or other means. These transactions can take several days to complete from the time you decide to send the money to when the beneficiary has the money in their hands. Both you and your beneficiary can free yourself from the hassle of having to visit a bank branch to prepare or cash the demand drafts or cheques.

There are faster and simpler ways to transfer money safely through use of RBI supported electronic funds transfer systems such as NEFT and RTGS. The fund transfers happen electronically for a relatively small fees and are completely safe. You can do the money transfer easily as long as you have an internet banking account with your bank and information about the beneficiary bank account. The money will be in your beneficiary’s bank account almost immediately (in case of RTGS) or in a few hours (if you use NEFT). You can execute the transaction entirely from the comfort of your home. Your beneficiary need not have a internet banking account to receive this money transfer.

This article aims to give you a primer on what you need to know if you are looking to transfer money to a beneficiary who has a bank account in the same or different bank as yours in a different part of India. This article has been compiled based on various sources including RBI and FAQs from major banks in India.

What is Inter Bank Transfer?

Inter Bank Transfer is a special service that allows you to transfer funds electronically to accounts in other banks in India through:

NEFT - The acronym “NEFT” stands for National Electronic Funds Transfer. Funds are transferred to the credit account with the other participating Bank using RBI’s NEFT service. RBI acts as the service provider and transfers the credit to the other bank’s account.

RTGS –The acronym “RTGS” stands for Real Time Gross Settlement. The RTGS system facilitates transfer of funds from accounts in one bank to another on a “real time” and on “gross settlement” basis. The RTGS system is the fastest possible inter bank money transfer facility available through secure banking channels in India.

What is the minimum/maximum amount for RTGS/NEFT transactions under Retail Internet Banking? 

Type Minimum Maximum
RTGS Rs. 1 Lakh Rs. 5 Lakh
NEFT No Limit Rs. 5 Lakh

When does the beneficiary get the credit for a RTGS payment?

Under normal circumstances the beneficiary bank’s branch receives the funds in real time as soon as funds are transferred by the remitting bank.

When does the beneficiary get the credit for a NEFT payment?

The funds will be sent to the RBI within three hours of the transaction. The actual time taken to credit the beneficiary depends on the time taken by the beneficiary bank to process the payment.

If an RTGS transaction is not credited to a beneficiary account, does the Remitter get back the money?

Yes. If it is unable to credit the amount of the remittance to the account of the beneficiary for any reason, the beneficiary’s bank has to return the money to the remitting bank within 2 hours. Once this amount is received back by the remitting bank, the amount is credited to the Remitter’s account by the remitting bank branch.

If an NEFT transaction is not credited to a beneficiary account, does the Remitter get back the money?

Yes. If the money cannot be credited for any reason, the beneficiary’s bank has to return the money to the remitting bank. Once this amount is received back by the remitting bank, the amount is credited to the Remitter’s account by the remitting bank branch.

At what time during the day/week the RTGS & NEFT services are available?

RTGS transactions will be sent to RBI based on the following schedule:

Day Start Time End Time
Monday to Friday 9:00 hrs 16:00 hrs
Saturday 9:00 hrs 12:00 hrs

NEFT transactions will be sent to RBI based on the following schedule:

Day Start Time End Time
Monday to Friday 8:00 hrs 16:00 hrs
Saturday 8:00 hrs 11:30 hrs

NEFT transactions are settled in batches based on the following timings:

  1. 6 settlements on weekdays - at 09:00, 11:00, 12:00, 13:00, 15:00 and 17:00 hrs.
  2. 3 settlements on Saturdays - at 09:00, 11:00 and 12:00 hrs.

Please note that all the above timings are based on Indian Standard Time (IST) only.

What is the mandatory information required to make an RTGS & NEFT payment?

The Remitter has to provide the following details:

  • Amount to be remitted.
  • Account number which is to be debited.
  • Name of the beneficiary bank.
  • Name of the beneficiary.
  • Account number of the beneficiary.
  • Remarks or description, if any.
  • The IFSC code of the beneficiary branch.

 How to find the IFSC code of the beneficiary branch?

You can find it from various sources including visiting Ratekhoj.com’s bank IFSC code search page (http://www.ratekhoj.com/banks/index.php).

Do all bank branches in India provide RTGS & NEFT services?

No. RTGS facility is enabled only in specific bank branches across India. You can view a list of these branches in the RBI website: www.rbi.org.in/Scripts/Bs_viewRTGS.aspx. NEFT is enabled only in specific bank branches across India. You can view a list of these branches in the RBI website: http://www.rbi.org.in/scripts/neft.aspx.

 What are the service charges applicable for RTGS/NEFT transactions?

Typical Charges for RTGS/NEFT as recommended by RBI are as listed in the following table:

  Amount Service Charge
RTGS Upto Rs.5 lakhs Rs.25/-
  Rs. 5 lakhs & above Rs.50/-
NEFT Upto Rs.1 lakh Rs.5/-
  Rs.1 lakh & above Rs.25/-

 

However, please check with your bank about their charges for the RTGS and NEFT services since they may differ slightly. Also note that typically there are no service charges that need to be paid by the beneficiary who is receiving this money transfer in their account.

As a note of caution, if you decide to remit or transfer money using the above electronic services, try it out with a small amount first using the NEFT system. Verify that your beneficiary has received this amount in their account. Once you are comfortable with the NEFT or RTGS modes of transfer, then you can transfer larger amounts.




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