From December 16, you can transfer money online using the National Electronic Funds Transfer (NEFT) route 24x7, i.e., any time of the day and any day of the week.
The Reserve Bank of India stated earlier on in the month, that bank customers will be able to transfer funds through NEFT around the clock on all days including weekends and holidays from December 16.
Added to this, in November, the central bank had directed from January 2020 banks can no longer charge savings bank account holders for online transactions in the NEFT system.
What is NEFT?
NEFT is a nation-wide payment system that allows transfer of funds from one bank account to another. Individuals, firms and corporates can transfer the money from one bank branch to any other bank account held by individual, firm or corporate in the country.
The beneficiary, i.e., the bank account in which money has to be transferred will receive the money within two hours. NEFT transactions can be used for payment of credit card dues to the card issuing banks, payment of loans EMI etc.
This will allow the bank customers to transfer the money all around the clock. Earlier, NEFT payment system operated for customers from 8:00AM to 7:00 PM on all working days except on 2nd and 4th Saturday as banks remain close on that day.
According to RBI’s circular issued on December 6, here is how the NEFT system will operate:
There will be 48 half-hourly batches every day.
The settlement of first batch will commence after 00:30 hours and the last batch will end at 00:00 hours. The system will be available on all days of the year, including holidays.
NEFT transactions after usual banking hours of banks are expected to be automated transactions initiated using ‘Straight Through Processing (STP)’ modes by the banks.
The existing discipline for crediting beneficiary’s account or returning the transaction (within 2 hours of settlement of the respective batch) to originating bank will continue.
Member banks will ensure sending of positive confirmation message (N10) for all NEFT credits. All provisions of NEFT procedural guidelines will be applicable for NEFT 24x7 transactions as well. No charges on online NEFT transactions
RBI has mandated banks to not to charge any fees on NEFT transactions done by savings account holders from January 1, 2020. According to the central bank’s press release, this move is aimed at pushing savings bank account customers to transfer money using electronic modes via NEFT.
The central bank in its monetary policy review held in July 2019 had announced its decision to do away with the charges levied for NEFT and RTGS transactions.
RBI’s statement said, “In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. Banks will be required, in turn, to pass these benefits to their customers.”
In July, almost immediately after RBI’s saying that banks should remove charges on NEFT, State Bank of India announced waiver of charges on NEFT, RTGS and IMPS.