RTGS (real time gross settlement) and NEFT (national electronic funds transfer) are electronic payment systems that allow individuals to transfer funds between banks. Both these systems are maintained by the Reserve Bank of India. It is applicable only for money transfer within the country.
- Electronic payment systems RTGS, NEFT are maintained by RBI
- Under RTGS, funds transfer takes place on real time basis
- NEFT operates on a deferred settlement basis
Under RTGS, the funds transfer takes place on a real time basis, or in other words, at the time the request is received. It is one of the fastest interbank money transfer facility available through banking channels in India. The beneficiary bank has to credit the recipient's account within 30 minutes of receiving the funds transfer message.
On the other hand, NEFT operates on a deferred settlement basis. Fund transfer under NEFT is settled in batches as opposed to the real-time settlement process in RTGS. The batches are settled in hourly time slots.
Do you need a bank account? Customers having savings or current account are eligible to avail NEFT/ RTGS service. Individuals who do not have a bank account can also deposit cash at the NEFT-enabled branches. However, such cash remittances will be restricted to a maximum of Rs 50,000 per transaction.
Timings: The RTGS window is available from 8 am to 16.30 pm on weekdays and working Saturdays. In case of NEFT, currently there are twelve settlements from 8 am to 7 pm. However, the timings that the banks follow may vary depending on the customer timings of the bank branches.
Online RTGS can be done only within the mentioned cut off time. In case of online NEFT, if the transaction is beyond the cut-off time, the funds will be transferred to the beneficiary bank on the next working day.
Minimum Amount: RTGS facility is meant for large value transactions. For retail customers, the minimum amount remitted through RTGS is Rs 2 lakh. There is no minimum amount for funds remitted via NEFT.
When Electronic Transactions Fail: For RTGS transactions, if for any reason - such as when the account does not exist or is frozen - it is not possible to credit the funds to the beneficiary customer's account, the money is credited into the sender's account once the money is received back by the remitting bank. The funds are returned to the originating bank within one hour or before the end of the RTGS business day, whichever is earlier.
For NEFT transactions, destination banks are required to return the fund to the originating branch within two hours of completion of the batch in which the transaction was processed.
Charges: NEFT charges don't exceed Rs 25 (excluding service tax) per transaction while for RTGS it does not exceed Rs 55 (excluding service tax). The charges are typically lower for internet banking as compared to carrying out the transaction through bank branches.
What to Note? In RTGS, since the transaction happens real-time and the fund settlement takes place in the books of the RBI, the payments are final and irrevocable. In case of NEFT too there is no facility for giving stop payment instruction if the transaction has been initiated by the bank.