FAQ on RTGS and NEFT

FAQ on RTGS and NEFT

Frequently Asked Questions (FAQ) on

Real Time Gross Settlement (RTGS) System

Q1.      What is RTGS System?

Ans. The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting). 'Real Time' means the processing of instructions at the time they are received rather than at some later time; 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable.

Q2.      How RTGS is different from National Electronics Funds Transfer System (NEFT)?

Ans. NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes place with all transactions received till the particular cut-off time. These transactions are netted (payable and receivables) in NEFT whereas in RTGS the transactions are settled individually. For example, currently, NEFT operates in hourly batches. [There are twelve settlements from 8 am to 7 pm on week days and six settlements from 8 am to 1 pm on Saturdays.] Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time Contrary to this, in the RTGS transactions are processed continuously throughout the RTGS business hours.

Q3.      Is there any minimum / maximum amount stipulation for RTGS transactions?

Ans. The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is ` 2 lakh. There is no upper ceiling for RTGS transactions.

Q4.      What is the time taken for effecting funds transfer from one account to another under RTGS?

Ans. Under normal circumstances the beneficiary branches are expected to receive the funds in real time as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary's account within two hours of receiving the funds transfer message.

Q5.      Would the remitting customer receive an acknowledgement of money credited to the beneficiary's account?

Ans. The remitting bank receives a message from the Reserve Bank that money has been credited to the receiving bank. Based on this the remitting bank can advise the remitting customer through SMS that money has been credited to the receiving bank.

Q6.      Would the remitting customer get back the money if it is not credited to the beneficiary's account? When?

Ans. Yes. Funds, received by a RTGS member for the credit to a beneficiary customer’s account, will be returned to the originating RTGS member within two hours of the receipt of the payment at the PI of the recipient bank or before the end of the RTGS Business day, whichever is earlier, if it is not possible to credit the funds to the beneficiary customer’s account for any reason e.g. account does not exist, account frozen, etc. Once the money is received back by the remitting bank, the original debit entry in the customer's account is reversed.

Q7.      Till what time RTGS service window is available?

Ans. The RTGS service window for customer's transactions is available to banks from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 14:00 hours on Saturdays for settlement at the RBI end. However, the timings that the banks follow may vary depending on the customer timings of the bank branches.

Q8.      What about Processing Charges / Service Charges for RTGS transactions?

Ans. With a view to rationalize the service charges levied by banks for offering funds transfer through RTGS system, a broad framework has been mandated as under:

(a) Inward transactions – Free, no charge to be levied.

(b) Outward transactions 2 lakh to 5 lakh not exceeding 30 per transaction;
Above 5 lakh – not exceeding 55 per transaction.

Q9.      What is the essential information that the remitting customer would have to furnish to a bank for the remittance to be effected?

Ans. The remitting customer has to furnish the following information to a bank for initiating a RTGS remittance:

1.    Amount to be remitted

2.    Remitting customer’s account number which is to be debited

3.    Name of the beneficiary bank and branch

4.    Name of the beneficiary customer

5.    Account number of the beneficiary customer

6.    Sender to receiver information, if any

7.    The IFSC Number of the receiving branch

Q10.    How would one know the IFSC code of the receiving branch?

Ans. The beneficiary customer can obtain the IFSC code from his bank branch. The IFSC code is also available on the cheque leaf. The list of IFSCs is also available on the RBI website (http://rbidocs.rbi.org.in/rdocs/RTGS/DOCs/RTGEB0112.xls). This code number and bank branch details can be communicated by the beneficiary to the remitting customer.

Q11.    Do all bank branches in India provide RTGS service?

Ans. No. All the bank branches in India are not RTGS enabled. Presently, there are more than 100000 RTGS enabled bank branches. The list of such branches is available on RBI website at: http://rbidocs.rbi.org.in/rdocs/RTGS/DOCs/RTGEB0112.xls

Q12.    Is there any way that a remitting customer can track the remittance transaction?

Ans. It would depend on the arrangement between the remitting customer and the remitting bank. Some banks with internet banking facility provide this service. Once the funds are credited to the account of the beneficiary bank, the remitting customer gets a confirmation from his bank either by an e-mail or SMS. Customer may also contact RTGS / NEFT Customer Facilitation Centres of the banks, for tracking a transaction.

Q13.    Whom do I can contact, in case of non-credit or delay in credit to the beneficiary account?

Ans. Contact your bank / branch. If the issue is not resolved satisfactorily, complaint may be lodged to the Customer Service Department of RBI at -

The Chief General Manager
Reserve Bank of India
Customer Service Department
1st Floor, Amar Building, Fort
Mumbai – 400 001
Or send email

Q14.    How can a remitting customer know whether the bank branch of the beneficiary accepts remittance through RTGS?

Ans. For a funds transfer to go through RTGS, both the sending bank branch and the receiving bank branch would have to be RTGS enabled. The lists are readily available at all RTGS enabled branches. Besides, the information is available at RBI website (http://rbidocs.rbi.org.in/rdocs/RTGS/DOCs/RTGEB0112.xls). Considering that more than 100000 branches at more than 20,000 cities / towns / taluka places are covered under the RTGS system, getting this information would not be difficult.

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Frequently Asked Questions (FAQ) on

National Electronic Funds Transfer (NEFT) System

Q.1.     What is NEFT System?

Ans. National Electronic Funds Transfer (NEFT) system is a nation wide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch.

Q.2.     Are all bank branches in the system part of the funds transfer network?

Ans. No. As on January 31, 2007, 18500 branches of 53 banks are participating. Steps are being taken to widen the coverage both in terms of banks and branches.

Q.3.     Whether the system is centre specific or has any geographical restriction?

Ans. No, there is no restriction in the number of centres or of any geographical area. The system uses the concept of centralised accounting system and the bank's account that are sending or receiving the funds transfer instructions, gets operated at one centre, viz, Mumbai only. The individual branches participating in NEFT could be located anywhere across the country, as detailed in the list provided on RBI website.

Q.4.     What is the funds availability schedule for the beneficiary?

Ans. The beneficiary gets the credit on the same Day or the next Day depending on the time of settlement.

Q.5.     How does the NEFT system operate?

Ans. Step-1: The remitter fills in the NEFT Application form giving the particulars of the beneficiary (bank-branch, beneficiary's name, account type and account number) and authorises the branch to remit the specified amount to the beneficiary by raising a debit to the remitter's account. (This can also be done by using net banking services offered by some of the banks)

Step-2: The remitting branch prepares a Structured Financial Messaging Solution (SFMS) message and sends it to its Service Centre for NEFT.

Step-3: The Service Centre forwards the same to the local RBI (National Clearing Cell, Mumbai) to be included for the next available settlement. Presently, NEFT is settled in six batches at 0930, 1030, 1200, 1300, 1500 and 1600 hours on weekdays and 0930, 1030 and 1200 hours on Saturdays

Step-4: The RBI at the clearing centre sorts the transactions bank-wise and prepares accounting entries of net debit or credit for passing on to the banks participating in the system. Thereafter, bank-wise remittance messages are transmitted to banks.

Step-5: The receiving banks process the remittance messages received from RBI and affect the credit to the beneficiaries' accounts.

Q.6.     How is this NEFT System an improvement over the existing RBI-EFT System?

Ans. The RBI-EFT system is confined to the 15 centres where RBI is providing the facility, whereas there is no such restriction in NEFT as it is based on the centralised concept. The detailed list of branches of various banks participating in NEFT system is available on our website. The system also uses the state-of-the-art technology for the communication, security etc, and thereby offers better customer service.

Q.7.     How is it different from RTGS and EFT?

Ans. NEFT is an electronic payment system to transfer funds from any part of country to any other part of the country and works on net settlement basis, unlike RTGS that works on gross settlement basis. While EFT is restricted to the fifteen centers (only where RBI offices are located), NEFT is a nation-wide electronic fund transfer system.

Q.8.     Any limit on the amount of individual transaction?

Ans. There is no value limit for individual transactions.

Q.9.     What about Processing Charges/Service Charges

Ans. While RBI has waived the processing charges till March 31, 2008, levy of service charges by banks is left to the discretion of the respective banks. The bank-wise details of charges levied are available on the RBI website.

Q.10.   How will I know which are the branches participating in the NEFT?

Ans. RBI publishes the list of bank branches participating in the NEFT on its website i.e. www.rbi.org.in.

Q.11.   What is IFS Code (IFSC)? How it is different from MICR code?

Ans. Indian Financial System Code (IFSC) is an alpha numeric code designed to uniquely identify the bank-branches in India. This is 11 digit code with first 4 characters representing the banks code, the next character reserved as control character (Presently 0 appears in the fifth position) and remaining 6 characters to identify the branch. The MICR code has 9 digits to identify the bank-branch. 

Q.12.   How will I know, what is the IFS Code of my bank-branch?

Ans. RBI had since advised all the banks to print IFSC on cheques leaves issued to their customers. You may also contact your bank-branch and get the IFS Code of that branch.

Q.13.   Whom I can contact, in case of non-credit or delay in credit to the beneficiary account?

Ans. Contact your bank/branch. If the issue is not resolved satisfactorily, the Customer Service Department of RBI may be contacted on cgmcsd@rbi.org.in or write to:

The Chief General Manager,

Reserve Bank of India,

Customer Service Department,

1st Floor, Amar Building, Fort,

Mumbai-400001

Q.14.   Is it necessary to have a bank account to originate the NEFT transaction?

Ans. Yes, NEFT is an account to account funds transfer system.

Q.15.   Is it necessary that the beneficiary should have an account at the destination bank-branch?

Ans. Yes, NEFT is an account to account funds transfer system.

Q.16.   Can I receive foreign remittances through NEFT?

Ans. This system can be used only for remitting Indian Rupee among the participating banks within the country.

Q.17.   Can I send remittances abroad using the NEFT?

Ans. No

Q.18.   Can I originate a transaction to receive funds from another account?

Ans. No

Q.19.   Can I send/receive funds from/to NRI accounts?

Ans. Yes, subject to applicability of provisions of FEMA

Q.20.   Would the remitting customer receive an acknowledgement of money having been credited to the beneficiary's account?

Ans. Acknowledgement is generated for the customer at his branch informing him that his remittance is received by the beneficiary. However the mode of communication would depend on the facility provided by bank / branch.

Q.21.   Would the remitting customer get back the money if it is not credited to the beneficiary’s account?

Ans. Yes, the remitting customer gets back the money if it is not credited to the beneficiary account.

Q.22.   Till what time NEFT service window is available?

Ans. There are six settlements at 0930, 1030, 1200, 1300, 1500 and 1600 hours on weekdays and 0930, 1030 and 1200 hours on Saturdays.

Q.23.   What is the essential information that the remitting customer would have to furnish for the remittance to be effected?

Ans. The essential information that the remitting customer has to furnish is:

·         Beneficiary details such as beneficiary name and account number

·         Name and IFSC of the beneficiary bank branch.

Q.24.   Is there any way a remitting customer can track the remittance transaction?

Ans. The remitting customer can track the remitting transaction through the remitting branch only, as the remitting branch is informed about the status of the remitted transactions.

Precautions when using NEFT and RTGS Transfer Systems

An electronic funds transfer (EFT) is generally considered both secure and safe since they have built-in security features. However, since they are often coursed through different communication mechanisms, it is also important to understand what precautions you need to take to stay safe.

Precautions:

·         Ignore emails supposedly coming from your bank, from PayPal or from you credit card service provider informing you that your account with them has been compromised. Usually, this also comes with an official-looking request and forms to fill up wherein you will provide all your personal information. The standard procedure observed in cases where such information is needed is to submit them directly at the secured website or at the bank itself.

·         Avoid downloading freebies like software applications since this is how malware or spyware gets attached to your PC. Spyware can extract information from your computer without your knowing it and can surreptitiously relay your info to the author of the spyware.

·         In case your credit cards, debit cards or ATM cards have been stolen, report the matter immediately to the credit company or to your depository bank to block all future transactions.

·         Make it a point to review your credit reports periodically if you frequently or regularly make purchases via online stores. Particularly if your credit purchases are your most common electronic transactions. Report any unauthorized transactions or cash advances immediately to the credit reporting bureau and to your credit card service provider.

·         Install additional security software if necessary. Some protection features may include those that can detect and block unusual activities going on in your PC.

·         Keep yourself up to date with the latest trends on how cybercrimes are carried out and know the precautionary measures to take.

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