The expansion of NEFT is National Electronic Fund Transfer. By using this system individual, firm or corporate can transfer the funds electronically from any bank branch to any other individual, firm or corporate having account in other bank branch in the country.
This payment network is kept by RBI. NEFT system is a funds transfer technique where transfer of fund occurs from one bank to another on a deferred net settlement basis. To provide the facility of NEFT to the customer the bank branch has to be NEFT enabled. To perform any transaction by using NEFT, IFSC (Indian Financial System Code) code is required. This code specifies the branch of a bank.
Some important points about NEFT are as follow:
1. In NEFT the transaction can be take place between two NEFT enabled bank branches. It can also be employed to transfer funds from or to NRE/NRO accounts in India. Remittance is not permitted to a foreign country, apart from Nepal.
2. In NEFT transactions are bunched up and executed in a bunch at specified time slot. In weekday there are 12 settlements that take place from 8 am to 7 pm, and on Saturday there are only 6 settlements that take place from 8 am to 1 pm. If a transaction is started after a batch settlement time, it is postponed to the next batch.
3. There is no lower or upper limit on the amount that can be transferred under NEFT.
4. There are some charges are applied on outward transaction while inward transaction are free. This ranges
from a minimum of Rs 2.50 for amounts up to Rs 10,000 to a maximum of Rs 25 for transfer amounts above Rs 2 lakh.
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