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NEFTNational Electronic Fund Transfer. In olden days, it was the practice of walking to the bank branch for transacting the fund transfer from one bank to another bank. But, in the present technology world, it is not necessary to walk to bank branch instead of that we can do all the banking transactions using our Smart phone itself. One of such transaction is Fund Transfer from one bank to another bank.

The banks are providing Mobile banking facility and Internet banking facility to customer for facilitating all the banking transactions using mobile phone and computers without walking to the branch. All we need to know is, we have to understand how to do a safe and secure transaction and what are the important information we must know before executing a transaction.

What is NEFT?

What is NEFT?

NEFT stand for National Electronic Fund Transfer. It is one of the Electronic fund transfer system that facilitates an efficient, secure, economical, reliable system of funds transfer in the banking sector through out India. NEFT is exclusively owned and operated by the Reserve Bank of India. It transfers the funds from one bank account to another bank account.

All the banks in India are providing this NEFT services to their customer. Regional Rural Bank (RRBs) are also providing this service to the customer through their sponsor bank.

You can use online mobile/internet banking for fund transfer through NEFT. Alternatively, you can also visit your bank branch for initiating NEFT funds transfer through branch/off-line mode.

How does the NEFT system work?


You can use your Internet/Mobile banking facility offered by your bank for initiating online funds transfer request through NEFT. You have to clearly provide details of beneficiary such as,

  • Name of the beneficiary
  • Name of the bank branch where the beneficiary has an account
  • IFSC of the beneficiary bank branch
  • Account Number as mentioned in the Passbook given by bank
  • Account type whether Savings account or Current account or Cash Credit, etc.


The sending bank prepares a fund transfer message and sends to its pooling centre called the NEFT Service Centre.


The pooling centre of respective bank forwards the message to the NEFT Clearing Centre operated by the RBI, to be included for the next available batch.


The NEFT Clearing Centre of RBI sorts the funds transfer transactions beneficiary bank-wise and prepares accounting entries to receive funds from the originating banks (debit) and give the funds to the beneficiary banks (credit). Step-5: The beneficiary banks receive the inward remittance messages from the Clearing Centre and pass on the credit to the beneficiary customer’s accounts

Others Points to note about NEFT

  • NEFT settles the funds to beneficiary account in batch wise (once in half an hour). So it will take half an hour or one hour to transfer funds to the beneficiary account.
  • It is every one’s responsibility to mention correct beneficiary details while executing the funds transfer through NEFT.
  • If you mention wrong beneficiary details the funds will not be transferred or funds will be transferred to wrong person.
  • The sending bank shall give you Unique Transaction Reference (UTR) reference number for each NEFT transaction through SMS and Email alert.
  • If any dispute rise on NEFT transaction, customer can make use of UTR of that transaction for addressing the issue.
  • RBI made this facility available for customers round the clock through out the year on all days, i.e, 24*7*365. Previously it was available only on bank working days.

NEFT Charges

  • RBI advised banks to not levy any charges from their savings bank account holders for NEFT funds transfers initiated online with effect from 1st January 2020
  • Maximum charges which can be levied for outward transactions at originating bank for other transactions
    • Rs. 2.50 + GST – For transactions up to ₹ 10,000
    • Rs. 5.00 + GST – For transactions above ₹ 10,000 up to ₹ 1 lakh
    • Rs. 15.00 + GST – For transactions above ₹ 1 lakh and up to ₹ 2 lakhs
    • Rs. 25.00 + GST – For transactions above ₹ 2 lakhs
 You can use NEFT facility for transferring amount up to Rs. 2.00 Lakhs.
 For more than 2.00 Lakhs, you can use another facility called RTGS.
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