Skip to main content

National Electronic Funds Transfer (NEFT) vs Real Time Gross Settlement (RTGS)

There are various options for online payments and fund transfers in India. In this article we will learn about two such options – National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS).

 

 National Electronic Funds Transfer (NEFT) Real Time Gross Settlement (RTGS)
Meaning It is a nation-wide centralised payment system owned and operated by Reserve Bank of India (RBI).
Nature of system It is credit-push systems i.e. transactions can be originated by payer / remitter / sender only to pay / transfer / remit funds to beneficiary.
Availability With effect from December 16, 2019, NEFT is available 24*365. With effect from December 14, 2020, RTGS is available 24*365.
Timeline for Settlement Transactions are settled in half-hourly batches (first batch at 00:30 and last batch at 00:00). Transactions are settled in real-time (i.e. immediately).
Nature of Settlement Transactions are settled on net basis. Transactions are settled on gross-basis i.e. individually on transaction-by-transaction basis (without netting). Payments are final and irrevocable.
Transaction limits There is no minimum / maximum limit for transaction amount.
However, maximum limit per transaction is ₹50,000/- for cash-based remittances by walk-in customers. 		The minimum amount to be remitted is ₹2,00,000/- with no maximum ceiling.
International transactions Remittances cannot be sent abroad. However, there is a facility for outward remittances to Nepal under Indo-Nepal Remittance Facility Scheme. Remittances cannot be sent abroad.
Charges levied by RBI on banks RBI does not levy any charges on member banks for NEFT / RTGS transactions with effect from July 01, 2019.
Charges for inward transactions Banks shall not levy any charges for inward transactions.
Charges for outward transactions Banks have been advised to not levy any charges from their savings bank account holders for NEFT funds transfers initiated online with effect from January 01, 2020.
Maximum charges which can be levied for other outward transactions are –
  • For transactions up to ₹10,000 – ₹2.5 (+GST)
  • For transactions above ₹10,000 and up to ₹1 lakh – ₹5 (+GST)
  • For transactions above ₹1 lakh and up to ₹2 lakh – ₹15 (+GST)
  • For transactions above ₹2 lakh – ₹25 (+GST)
 Maximum charges which can be levied for outward transactions are –
  • For transactions of ₹ 2 lakh to ₹5 lakh – ₹25 (+Tax)
  • For transactions of above ₹5 lakh – ₹50 (+Tax)
Penalty for delay If transaction is not credited / returned within 2 hours from the batch settlement, the banks are liable to pay penal interest to customer at current repo rate + 2% for the period of delay / till the date of refund. If transaction is not credited within 30 minutes / returned within 1 hour, the beneficiary bank is liable to pay penal interest to customer at current repo rate + 2% for the period of delay / till the date of refund.
Prerequisites for transactions Fund transfer request can be initiated online using internet / mobile banking facility or through branch / off-line mode. The remitter has to provide beneficiary name, IFSC of the beneficiary bank branch, beneficiary account number, etc.
Identification of beneficiary Credit to beneficiary is released solely based on the account number of the beneficiary.
Grievance redressal For raising dispute / complaint related to NEFT / RTGS transactions customer may approach grievance redressal cell of the bank. In case the grievance is not resolved within 30 days, he / she may make a complaint under ‘RBI - Integrated Ombudsman Scheme’.


What is Indian Financial System Code (IFSC)?

‘Indian Financial System Code (IFSC)’ is an alpha-numeric code that uniquely identifies a bank-branch participating in the NEFT / RTGS system. This is an 11-character code – first 4 characters (alphabets) represent bank, 5th character is always zero (0), and last 6 characters (alphabets or numerals) represent bank branch.

List of bank-wise branches and their IFSCs is available on the website of RBI at https://rbi.org.in/Scripts/IFSCMICRDetails.aspx.

What is Unique Transaction Reference (UTR) / Transaction Identification Number?

‘Unique Transaction Reference (UTR) / Transaction Identification Number’ identifies a transaction uniquely. It is 22-characters in length – first 4 character are IFSC of the sender bank, 5th character ‘R’ stands for RTGS, 6th character ‘C’ represents channel of transaction, 7th to 14th characters indicate the date of transaction, and 15th to 22nd characters denote the sequence number.

What is the beneficiary bank account name look-up facility for RTGS and NEFT?

To ensure that remitters using RTGS and NEFT systems can verify the name of the bank account to which money is being transferred before initiating the transfer and thereby avoid mistakes and prevent frauds, a solution for fetching the beneficiary’s name is being implemented. Based on the account number and IFSC of the beneficiary entered by the remitter, the facility will fetch the beneficiary’s account name from the bank’s Core Banking Solution (CBS).

  • This facility shall be made available to remitters through Internet banking and Mobile banking as well as to remitters visiting branches for making transactions.
  • Provision to verify beneficiary bank account name shall be provided in Internet banking and Mobile banking facilities at the time of registering a beneficiary and at the time of one-time fund transfer where the beneficiary may not be registered.
  • Provision to re-verify a registered beneficiary at any time shall also be provided.
  • Beneficiary account name provided by the beneficiary bank shall be displayed to the remitter. 
  • In case the beneficiary name cannot be displayed for any reason, the remitter can proceed with the fund transfer, at his / her discretion.
  • Beneficiary account name lookup facility shall be made available to customers without any charge.
  • All banks who are direct members or sub members of RTGS and NEFT shall offer this facility no later than April 01, 2025.


References

Reserve Bank of India. (2013, October). 'Real Time Gross Settlement (RTGS) ((Amended in December 2020)'. Retrieved from https://rbidocs.rbi.org.in/rdocs/RTGS/PDFs/RTGSC9F15CE30FC14FCB92B87597984CFA60.PDF

Reserve Bank of India. (2019, December 06). 'Availability of National Electronic Funds Transfer (NEFT) System on 24x7 basis'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11750&Mode=0

Reserve Bank of India. (2022, October 31). 'FAQ - National Electronic Funds Transfer (NEFT) System'. Retrieved from https://www.rbi.org.in/Scripts/FAQView.aspx?Id=60

Reserve Bank of India. (2022, October 31). 'FAQ - Real Time Gross Settlement System (RTGS) System'. Retrieved from https://www.rbi.org.in/Scripts/FAQView.aspx?Id=65

Reserve Bank of India. (2024, December 30). 'Introduction of beneficiary bank account name look-up facility for Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) Systems'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12759&Mode=0


Follow at - Telegram   Instagram   LinkedIn   Twitter

Labels:

Comments

Post a Comment

Popular Posts

Payments Vision 2028

Reserve Bank of India (RBI) has released the Payments Vision 2028. Payments Vision RBI has been publishing Payments Vision documents since 2001. These documents provide a strategic direction for development of the payment and settlement systems in India. The previous vision document covered the period up to 2025. Payments Vision 2028 Duration – up to December 2028 Theme – Shaping India’s Payment Frontier Focus Areas –  User empowerment Safeguards against fraud Efficiency of cross-border payment frameworks  Promoting ease of doing business Consists of 15 specific initiatives to be taken up –   Specific initiatives Inclusivity and resilience Framework for interoperability in Trade Receivables Discounting System (TReDS) Safety in digital payments Enabling or disabling transactions across digital payment modes via issuer channels Shared responsibility framework with both the customer’s bank (issuer) and the beneficiary’s bank jointly be...
Post a Comment
Read more

Credit Facilities – Lending against Gold and Silver Collateral

Reserve Bank of India (RBI) has issued directions on credit facilities offered by various regulated entities. This article summarises the directions applicable to lending against gold and silver collateral. To whom are the directions applicable? The directions are applicable to the following Regulated Entities (REs) – Commercial Banks  Small Finance Banks (SFBs) Local Area Banks (LABs) Regional Rural Banks (RRBs) Primary (Urban) Co-operative Banks (UCBs) Rural Co-operative Banks – State Co-operative Banks (StCBs) Central Co-operative Banks (CCBs) Non-Banking Financial Companies (NBFCs) for all layers – Deposit taking NBFC (NBFC-D) NBFC-Investment and Credit Companies (NBFC-ICC) NBFC-Factor  NBFC-Micro Finance Institutions (NBFC-MFI)  NBFC-Infrastructure Finance Company (NBFC-IFC)  Infrastructure Debt Fund-NBFC (IDF-NBFC)  Housing Finance Company (HFC)  To whom are the directions partially applicable? The prudential regulations are not applicable to ‘NBFCs-B...
Post a Comment
Read more

Credit Facilities – Digital Lending Guidelines

Reserve Bank of India (RBI) has issued directions on credit facilities offered by various regulated entities. This article summarises the directions applicable to digital lending. To whom are the directions applicable? The directions are applicable to the following Regulated Entities (REs) – Commercial Banks  Small Finance Banks (SFBs) Local Area Banks (LABs) Regional Rural Banks (RRBs) Primary (Urban) Co-operative Banks (UCBs) Rural Co-operative Banks – State Co-operative Banks (StCBs) Central Co-operative Banks (CCBs) All India Financial Institutions (AIFIs) regulated by RBI – Export Import Bank of India (EXIM Bank) National Bank for Agriculture and Rural Development (NABARD) National Housing Bank (NHB) Small Industries Development Bank of India (SIDBI) National Bank for Financing Infrastructure and Development (NaBFID) Non-Banking Financial Companies (NBFCs) for all layers – Deposit taking NBFC (NBFC-D) NBFC-Investment and Credit Companies (NBFC-ICC) NBFC-Factor  NBFC-Micro...
Post a Comment
Read more

Regulations for Authorised Persons

Reserve Bank of India (RBI) has issued a revised framework for authorisation of any person as an Authorised Person under the Foreign Exchange Management Act (FEMA), 1999. Who can act as an Authorised Person? No person shall act as an authorised person without obtaining an authorisation from the RBI. A person seeking authorisation as an authorised person may apply to the RBI through the PRAVAAH portal (https://pravaah.rbi.org.in) to the regional office concerned of the RBI under whose jurisdiction the registered office of the applicant is established. RBI shall consider applications for fresh authorisation under 3 categories, namely, Authorised Dealer (AD) Category-I, AD Category-II and AD Category-III. Which entities are eligible to act as an Authorised Person? Category Eligible entities AD Category-I A bank licensed by the RBI. AD Category-II A bank licensed by the RBI or a Non-Banking Financial Company (NBFC) registered with the RB...
Post a Comment
Read more

Guidelines on Money Changing Activities (Updated as on May 06, 2026)

Reserve Bank of India (RBI) has updated the guidelines on money changing activities. What are the guidelines for appointment of agents / franchisee? RBI had permitted Authorised Dealers (ADs) Category - I, ADs Category - II and Full Fledged Money Changers (FFMCs) to enter into agency or franchisee agreements at their option for the purpose of carrying restricted money changing business i.e. conversion of foreign currency notes, coins or travellers' cheques into Indian Rupees (INR).  A franchisee can be any entity which has a place of business and a minimum Net Owned Funds of ₹10 lakh.  Franchisees can undertake only restricted money changing business. Franchisees of AD Category - I / AD Category - II / FFMCs functioning within 10 kms from the borders of Pakistan and Bangladesh may also sell the currency of the bordering country, with the prior approval of RBI.  Other franchisees of AD Category - I / AD Category - II / FFMCs cannot sell foreign currency. An authorised pers...
Post a Comment
Read more