FAQS on NEFT for businesses

NEFT has garnered more and more attention in recent years as a method of instant fund transfer by individuals and companies. Let’s answer a few frequently asked questions about the NEFT limit.

What is the National Electronic Funds Transfer (NEFT) system?

NEFT is a money transfer method that allows for one-to-one transfers within India. The Reserve Bank of India owns and operates NEFT, which will enable you to transfer money from one account to another.

What are the advantages of using the NEFT system?

NEFT offers the following advantages:

• It is available 24 hours a day, 365 days a year.
• Funds are sent to the recipient account in near-real-time and safely.
• Pan-India coverage is provided through a massive network of branches of various banks.
• Positive confirmation of credit to beneficiary account sent to remitter through SMS/e-mail.
• Penalty interest is charged if credit is delayed or transactions are returned.
• The RBI does not collect fees on banks.
• Customers with savings bank accounts pay no fees for online NEFT transactions.
• Aside from cash transfers, customers may utilise the NEFT system for operations such as credit card payments to card-issuing banks, loan EMI payments, inbound foreign currency remittances, etc.
• One-way cash transfers from India to Nepal are possible.

How does the NEFT system operate?

The remitter must complete the beneficiary information on the NEFT application form and authorise the department to debit the amount specified on the application form from their account. Beneficiary banks receive inbound remittance alerts from the clearing centre and credit the beneficiary clients’ accounts.
The remitter must provide beneficiary information such as the beneficiary’s name, the name of the bank branch where the beneficiary has an account, the IFSC of the beneficiary’s bank branch, the account type and account number, and so on for the beneficiary to be added to their internet/mobile banking module. From the centre for pooling, the message forwards to the RBI’s NEFT clearing centre, which is included in the next available batch.

What is the Indian Financial System Code (IFSC)?

The Indian Financial System Identifier, or IFSC, is an alpha-numeric code that uniquely identifies a bank branch participating in the NEFT system. The NEFT system uses IFSC to identify the source/destination banks/branches and route messages to the relevant banks/branches.

How to find the IFSC of a bank branch?

A bank-by-bank list of IFSCs is given for all bank branches participating in the NEFT programme. The list of bank branches participating in NEFT and their IFSCs is also published on the RBI website.

Who can avail NEFT system for transferring and receiving funds?

Individuals, businesses, and corporations with accounts at any member bank participating in the NEFT system can electronically transfer payments to any other individual, firm, or corporation in the nation with an account at any other bank participating in the NEFT system.

Is there any limit on funds to be remitted through the NEFT system?

No, the RBI has not set any NEFT limits. Banks may impose quantity restrictions depending on their risk perception with their board’s consent.

Can NEFT be used for transferring funds by those who do not have a bank account?

Yes, a person who does not have a bank account can send funds via NEFT to a recipient with a bank account with another NEFT member bank. Depositing cash at the nearest NEFT equipped branch of any bank is possible. Still, the NEFT limit is a maximum of Rs.50,000/- per transaction.

Can I send funds to a relative/friend residing abroad through the NEFT system?

Nepal’s outbound remittances via the NEFT system are exclusively authorised under the Indo-Nepal Remittance Scheme.

What are the operating hours of the NEFT system?

NEFT is available around the clock, every day of the year, i.e., 24/7 * 365.

What are the customer charges for NEFT transactions?

The RBI does not charge member banks fees for NEFT transactions. In addition, there are no fees for inward transactions at destination bank offices for crediting beneficiary accounts. Banks may charge their customers for NEFT transfers on external transactions.

What happens if the funds are not credited to the intended recipient? Or, if funds are not credited to the recipient for various reasons, do I receive my money back?

If the remittor cannot extend credit to the beneficiary’s account, destination banks must return the transaction (to the originating branch) within two hours of the transaction’s batch.

Whom should I approach for raising a dispute/complaint related to the NEFT transaction?

You may contact your bank’s grievance redressal department and provide facts about the disputed transaction. Suppose your concern is not handled within 30 days. In that case, you may file a complaint with “The Reserve Bank-Integrated Ombudsman Scheme (RB-IOS, 2021)”.