These are the Reserve Bank approved electronic fund transfer methods in India .RTGS means Real Time Gross Settlement while NEFT stands for National Electronic Fund Transfer.
RTGS- Real Time Gross Settlement
Real time gross settlement systems (RTGS) are funds transfer systems where transfer of money or securities takes place from one bank to another on a "real time" and on "gross" basis. Settlement in "real time" means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. "Gross settlement" means the transaction is settled on one to one basis without bunching or netting with any other transaction. Once processed, payments are final and irrevocable.
The minimum amount to be remitted through RTGS is Rs 2 lakh. There is no upper ceiling for RTGS transactions.
The transfers are processed by banks on an individual basis as and when received. As per RBI regulations the RTGS system is primarily meant for large value transactions.The beneficiary bank has to credit the beneficiary’s account within two hours of receiving the funds transfer message, but not all banks are enabled with RTGS.The RTGS service window for customer’s transactions is available from 9.00 am to 16.30 pm on weekdays and from 9.00 am to 13.30 pm on Saturdays for settlement at the RBI end. However, the timings that the banks follow may vary depending on the customer timings of the bank branches.
RTGS Processing Charges: Inward transactions at destination bank branches (for credit to beneficiary accounts), no charges are required,Rs. 2 lakh to Rs. 5 lakh – not exceeding Rs. 30 per transaction,Above Rs. 5 lakh – not exceeding Rs. 55 per transaction.
NEFT- National Electronic Fund Transfer
The national electronic fund transfer (NEFT) system is a nation-wide system that facilitates individuals, firms and corporates to electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country. For being part of the NEFT funds transfer network, a bank branch has to be NEFT-enabled. As at end-January 2011, 74,680 branches / offices of 101 banks in the country (out of around 82,400 bank branches) are NEFT-enabled. Steps are being taken to further widen the coverage both in terms of banks and branches / offices.
NEFT Timings:
Currently, NEFT operates in hourly batches - there are eleven settlements from 8 am to 7 pm on week days and five settlements from 8 am to 1 pm on Saturdays.
Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time.RTGS transactions are processed continuously throughout. The RTGS service window for customer's transactions is available from 9:00 hours to 16:30 hours on week days and from 9:00 hours to 13:30 hours on Saturdays for settlement at the RBI end.
Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time.RTGS transactions are processed continuously throughout. The RTGS service window for customer's transactions is available from 9:00 hours to 16:30 hours on week days and from 9:00 hours to 13:30 hours on Saturdays for settlement at the RBI end.
No Transaction on weekly holidays and public holidays.
Even those individuals who do not have a bank account can also deposit cash at the NEFT-enabled branches with instructions to transfer funds using NEFT. According the RBI regulations, such cash remittances will be restricted to a maximum of Rs.50,000/- per transaction and the individuals will have to furnish full details including complete address, telephone number, etc. However to receive the remittances, it is necessary for the individual or corporate to have an bank account with a NEFT enabled bank branch in the country.
NEFT TIMINGS
The beneficiary can expect to get credit for the first nine batches on weekdays (i.e., transactions from 9 am to 5 pm) and the first four batches on Saturdays (i.e., transactions from 9 am to 12 noon) on the same day. For transactions settled in the last two batches on weekdays (i.e., transactions settled in the 6 and 7 pm batches) and the last batch on Saturdays (i.e., transactions handled in the 1 pm batch) beneficiaries can expect to get credit either on the same day or on the next working day morning.
NEFT – Processing Charges
The structure of charges that can be levied on the customer for NEFT is given below:
a) Inward transactions at destination bank branches (for credit to beneficiary accounts)
- Free, no charges to be levied from beneficiaries
b) Outward transactions at originating bank branches (charges for the remitter)
- For transactions up to 10,000 - not exceeding 2.50 (+ Service Tax)
- For transactions above 10,000 up to 1 lakh - not exceeding 5 (+ Service Tax)
- For transactions above 1 lakh up to 2 lakhs - not exceeding 15 (+ Service Tax)
- For transactions above 2 lakhs - not exceeding 25 (+ Service Tax)
- For transactions up to 10,000 - not exceeding 2.50 (+ Service Tax)
- For transactions above 10,000 up to 1 lakh - not exceeding 5 (+ Service Tax)
- For transactions above 1 lakh up to 2 lakhs - not exceeding 15 (+ Service Tax)
- For transactions above 2 lakhs - not exceeding 25 (+ Service Tax)
IFSC or Indian financial system code is required to perform a transaction using NEFT or RTGS. IFSC code identifies a specific branch of a bank.The RBI has advised the banks to print the IFSC of the branch on cheques issued to their customers so you can find the IFSC code on the cheque leaf.
For more info visit http://en.wikipedia.org/wiki/NEFT#National_electronic_fund_transfer