Effective from 10th July 2017, RBI will be going to introduce the new NEFT Timings. Let us see the changes. It is I think will be in the right way and hugely impact all of us in many ways.
What is the meaning of NEFT or National Electronic Funds Transfer?
It is a nationwide payment system facilitating one-to-one fund transfers. Using this system, you can transfer funds from any bank branch to any individual having an account with any other bank within India.
Let us take an example. Mr.X has a bank account with HDFC and he wants to transfer the money to Mr.Y, whose account is with ICICI. Therefore, by using NEFT facility Mr.X can transfer money to Mr. Y’s bank account.
Existing NEFT Timings
Currently, NEFT operates in hourly batches – there are twelve settlements from 8 AM to 7 PM during weekdays (Monday through Friday) and 6 settlements from 8 am to 1 pm on Saturdays.
The money will be transferred in a batch. Any money transfer you initiated during 8 AM to 9 AM, will be settled at 9 AM. Likewise, it will be settled in batch wise.
New NEFT Timings Effective from 10th July 2017
To make it more customer friendly, RBI announced that from 10th July 2017, the settlement will be on half hourly basis.
As announced in the First Bi-monthly Monetary Policy Statement for 2017-18, additional settlements in the NEFT system at half-hour intervals are being introduced to enhance the efficiency of the system and add to customer convenience. The half hourly settlements would speed up the
The half hourly settlements would speed up the fund’s transfer process and provide faster credit to the destination accounts.
Now the new NEFT Timings will be as below.
As per above table, you noticed that the settlement frequency now doubled from the existing NEFT Timings. This is the positive move and definitely will support the digital transaction movement of the Government.
What is the meaning of RTGS-Real Time Gross Settlement?
In NEFT, money transfer requests are clubbed together called batches. Such batches are settled based on Deferred Net Settlement (DNS) on hourly base during NEFT timings. Whereas in RTGS it is real time. It means money transferred individually instead of batches instantly. Therefore, compare to RTGS system is faster than the NEFT.
Let us take an example. Mr.X has a bank account with HDFC and he wants to transfer the money to Mr.Y, whose account is with ICICI. Therefore, by using RTGS facility Mr.X can transfer money to Mr. Y’s bank account instantly. In this transaction, HDFC transfers the initiated transfer amount to ICICI bank instantly. However, ICICI bank has a maximum 30 minutes time to deposit into Mr. Y’s account. Hence, depending on the beneficiary bank’s procedure within two hours Mr.Y get the amount in his account.
Existing RTGS Timings
There is no change in the current existing RTGS timings. Below is the current RTGS timings.
You notice from above table that for customers, the cut off timing will be 4.30 PM. The RTGS service window for customer’s transactions is available to banks from 9.00 AM to 4.30 PM on weekdays and from 9.00 AM to 2 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.