FUND TRANSFER: RTGS AND NEFT

RTGS

RTGS stands for Real Time Gross Settlement, which can be defined as the continuous (Real Time) settlement of funds individually or by order. 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 fund transfer instruction occurs individually.

RTGS system is generally meant for large value transactions as the minimum amount to be transfer through RTGS is Rs. 2,00,000. The maximum limit vary from bank to bank as there is no maximum limit specified by Reserve Bank Of India.

NEFT

NEFT stands for National Electronic Fund Transfer. NEFT is maintained by RBI and was started in November 2005. It is a national wide payment facility under which an individual can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country. There is no minimum limit that can be transferred using NEFT. It is done through electronic means and can be availed through online banking or through ATM’s in some banks.

Advantages of NEFT

• The sender need not send the physical cheque or Demand Draft to the Beneficiary.

• The Beneficiary need not visit his his/her bank for depositing the paper instrument.

• Credit confirmation is send by message or E-mail

•A customer can use this facility from his home place by using the internet.

Difference between RTGS and NEFT