neft rtgs etc. _20s_ppt

7/28/2019 Neft Rtgs Etc. _20s_ppt

http://slidepdf.com/reader/full/neft-rtgs-etc-20sppt 1/19

NEFT/RTGS



Evolution of the Payment System in India

• Earliest Payment Instrument - Coins punch-marked or cast in silver or copper & credit system involved Bills of

Exchange.

• In ancient India - rnapatra or rnalekhya.

• In Mauryan period – adesha• In Mughal period – dastawez

dastawez-e-indultalab

dastawez-e-miadi

barattes



• Hundis

were used,

as remittance instruments

as credit instruments

for trade transactions

types of Hundis, Darshani Hundis

Muddati Hundis

• Paper Money

• Cheques

• Post Bill – Inland Promissory Notes



• Cash Credit Account & Buying and Selling of Bills of

Exchange

• Negotiable Instruments Act, 1881• Clearing House

• Reserve Bank of India (RBI)

• Till early 2000, cash, DDs & cheque payments were the

famous modes of transactions

• Payment going E-way

ECS (Credit)

ECS (Debit) NEFT

Credit cards & Debit cards etc



Classification



National Electronic Fund Transfer

(NEFT)

• Introduced in November 2005

• Electronic funds transfer

• „Eleven‟ hourly settlements

– Weekdays : 9 am to 7 pm

– Saturday : 9 am to 1 pm



NEFT Transfer Online screen



Request for NEFT by bank customer

Data Entry at the Sending Bank Branch

Processing /Data Upload at Sending NEFT Service Centre

Transmission/Submission of NEFT message to the NEFT centre

Processing & transmission of NEFT message to the beneficiary banks

Data validation at receiving NEFT Service Centre

Payment to beneficiary

PROCESS



How does NEFT system operate

Step 1: First of all, the remitter has to provide the requisiteinformation like

• Beneficiary‟s Name.

• Beneficiary‟s Account number.

• Beneficiary‟s Account type ( cash credit, loan account, etc)

• Bank name, location & base branch in which the

beneficiary account is held.

• IFSC code of beneficiary bank etc in order to start the

process of NEFT.

Step 2: The bank branch at which the fund transfer request

originated, prepares a message and sends it to its pooling

centre (also called the NEFT Service Centre).



Step 3: The pooling centre forwards the message to the NEFT

Clearing Centre (operated by the National Clearing Cell, RBI,

Mumbai) to be included in the next available batch.

Step 4: The RBI at the clearing centre sorts the transactions

bank- wise and prepares accounting entries to receive funds from

(debit) the originating banks and give the funds to (credit) the

destination banks. Thereafter, bank-wise remittance messages

are forwarded to the destination banks through their poolingcentre (the NEFT Service Centre).

Step 5: The destination banks receive the remittance messages

from the Clearing Centre and pass on the credit to the beneficiary

accounts.



Benefits

• Faster – Its faster and more convenient than

sending Demand Drafts / Cheques / TelegraphicTransfers.

• Easier – Forget long queues and time-consuming

DDs, cheques and pay orders! No need to visit the

bank branch and search for a courier.

• Reach – No Geographical limitations within India as

long as it is a participating bank in the RBI's

RTGS/NEFT system.



Indian Financial System Code(IFSC)

• IFSC Code is 11 digit code for identifying the bank

and branch

• Used by both RTGS and NEFT finance transfer

systems

• code consists of 11 characters- first 4 characters – entity

fifth position - „0‟

last 6 characters – branch number

• E.g. (ICIC0000039) is an IFSC code of one of the

branches of ICICI Bank.



Real Time Gross Settlement (RTGS)

• Started in October 2004

• Transactions of a value of greater than “Rupees Two

Lac “ is processed and no upper limit

• RTGS is a large value funds transfer system• Transfer of money takes place from one bank to another

on a “real t ime ” and on “gross bas is ”

• Money can be transferred to only those branches of banks where RTGS facility is enabled



Features of RTGS system

• Participant Interface (PI)

• Y-Topology



Features Contd.

• Intra-day Liquidity Provision

• Interaction with Net Settlement Systems



RTGS Transaction Flow

Customer fills up the

RTGS funds transfer

request form.

Remittance Amount

and Charges arepaid

as per desired mode

Data entry and its

authorization in CBS

System.

Data transmitted to

Intra-day Liquidity

Management.

Data transmitted to

the PI maintained at

Belapur.

Data flows through

to the RBI‟s IFTP and RTGS server

Recipient Bank gets

confirmation andcredits Customer

a/c.



Limitation Benefits



Criteria NEFT RTGS

Settlement Done in batches (Slower) Real time (Faster)

Minimum amount of moneytransfer limit No Minimum 1 lacs

Maximum amount of

money transfer limitNo Limit No Limit

When does the CreditHappen in beneficiary

account

Happens in the hourlybatch Between Banks

Real time between Banks

Maximum Charges as per

RBI

Upto 10,000 – Rs 2.5

from 10,001 – 1 lac – Rs 5

from 1 – 2 lacs – Rs 15 Above 2 lacs – Rs 25

Rs 25-30 (Upto 1 – 5 lacs)

Rs 50-55 (Above 5 lacs)

(Lower charges for first half of day)

Suitable for Small Money Transfer Large Money Transfer



Thank You.

neft rtgs etc. _20s_ppt

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