Wednesday , 16 April 2014

Real Time Gross Settlement RTGS , National Electronic Funds Transfer NEFT

What is RTGS ?
RTGS is “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.Once processed, payments are final and irrevocable.

What do you mean by Real Time? What is the Meaning of Gross Settlement?
“Gross settlement” means the transaction is settled on one to one basis without bunching or netting with any other transaction.


What is NEFT ?
NEFT is “National Electronic Funds Transfer NEFT 
The NEFT is a nation wide payment system facilitating one-to-one funds transfer. Under this system,individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an acount with any other bank branch in the country participating in the system.

RTGS Vs NEFT :
RTGS and NEFT both are schemes by RBI for the benefit of the customers which allow accounts holders in the banks to electronically  transfer the funds intra-bank. 
RTGS- settlement in on ‘Real Time’ basis and on Gross basis i.e. one by one
NEFT- settlement in on batch basis and net basis.

What are the minimum and maximum amount of remittance under RTGS and NEFT :
RTGS Minimum Amount:RS 2 lakhs   Maximum Amount:No limit
NEFT Minimum Amount:No Limit     Maximum Amount:No limit

Note: Maximum amount per transaction is limited to Rs.50,000/- for cash-based remittances.
 

Operating hours of RTGS / NEFT :
NEFT : RBI has prescribed NEFT operates in hourly batches – there are twelve settlements from 8 am to 7 pm on week days (Monday through Friday) and six settlements from 8 am to 1 pm on Saturdays.
RTGS : RBI has prescrbed 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.

Note:The timings of both RTGS and NEFT at the bank can vary depending on the customer timings of the bank branches.

Processing / Service Charges for RTGS and NEFT transactions :
RTGS :
(a) Inward Transactions : Free, no charge to be levied;  
(b) Outward Transactions: Rs 2 lakh to Rs 5 lakh – Not exceeding Rs 30 per transaction; Above Rs 5 lakh – not exceeding Rs 55 transactions;
NEFT :
(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 applicable for the remitter
-For transactions up to Rs  10,000 : not exceeding Rs 2.50 (+ Service Tax)
-For transactions above Rs 10,000 up to Rs  1 lakh: not exceeding Rs 5 (+ Service Tax)
-For transactions above Rs 1 lakh and up to Rs 2 lakhs: not exceeding Rs 15 (+ Service Tax)
-For transactions above Rs 2 lakhs: not exceeding Rs 25 (+ Service Tax)
 

 

About CA Ashutosh Singh

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