Full Form of NEFT, National Electronic Funds Transfer

What is NEFT?

The NEFT full form is National Electronic Funds Transfer. It is a nationwide electronic payment system introduced by the Reserve Bank of India (RBI). Hence, any individual can transfer money to each other across the country through NEFT. 

However, it is compulsory for both the involved parties i.e beneficiary and benefactor to possess a bank account in any of the branches. With this electronic mode, anyone can transfer money within a few minutes. Moreover, there are no time restrictions to use this mode to transfer cash as it is available every time.

Prerequisites for NEFT Transaction

Firstly, the benefactor needs to add the bank details of the individual or entity receiving their money as beneficiary. Thus, they need to submit the following beneficiary details to perform the NEFT transactions successfully.

• Name of Beneficiary
• Branch Name
• Bank Name
• Account Type
• Account Number
• Branch IFSC code

How Does NEFT Operates?

NEFT is one of the fastest and most secure modes used by the individual to send money. The individual/firm/corporate willing to transfer money through NEFT can use the internet / mobile banking medium offered by their bank to send funds. Mentioned below is the step-by-step instruction to complete the transaction successfully.

Step 1: First, add all the details of the beneficiary such as the beneficiary's name, bank branch name, etc.

Step 2: After the addition of beneficiaries, they can transfer the fund.

Step 3: Then, the bank will generate the message and sends it to the NEFT Service Centre after they execute the transaction,

Step 4: NEFT Service Centre transfers the message to the RBI-operated NEFT Clearing Centre.

Step 5: Next, the Clearing Centre sorts the money transfer request by the recipient bank. It prepares accounting entries to deduct funds from the sender and credit the funds to the beneficiary banks.

Step 6: After that, a payment message is sent to the beneficiary banks through the NEFT Service Centre.

Step 7: Lastly, the beneficiary banks receive the inward remittance notification from the Clearing Centre and credit amount to the beneficiary accounts.

Alternatively, the remitter can also visit their bank branch for transferring NEFT funds through branch/offline mode. Next, they need to fill in the beneficiary details in the NEFT application form given at the bank branch. 

After that, they also need to authorize the branch to debit to their account the amount requested in the NEFT application form.

Eligibility Criteria for NEFT

Any Individuals, firms, and corporates having accounts with any member bank are also eligible to send money through the NEFT system. They can electronically transfer funds from one account to another within the same bank as well as other banks. 

Also, they need to enter the asked details correctly to complete the transactions successfully. However, any discrepancies in the details will lead to failure in a transaction.

Features of NEFT

Here is the list of various benefits and features of NEFT shared below:

• Firstly, it is one of the fastest and safest medium to send money.
• This facility is available on all days of the year.
• The beneficiary's bank account will receive funds within a few minutes.
• Pan-India coverage via a large network of branches of all types of banks.
• It is not essential for beneficiary to visit any bank branch to deposit the paper instruments. They can also initiate remittances from anywhere using internet banking if their bank provides such a service.

What is the Fund Transfer Limit of NEFT?

There is no limit imposed by the Reserve Bank of India for funds/money transfers through the NEFT system. However, a member bank may impose amount restrictions based on its own risk perception with its Board approval.

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