Electronic Funds Transfer (EFT) System is dead.

Electronic Funds Transfer (EFT) System is dead.

Reserve Bank of India, has decided to wind-up the Electronics Funds Transfer procedure.

This was required as the number of transactions in the EFT cycle were declining due to the popularity of National Electronics Funds Transfer (NEFT)

Brief History of EFT : -

01)                      This was set up in 1997, by Reserve Bank of India.

02)                      Initially, the The System  covered centres viz. Ahmedabad, Bangalore, Bhubneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvanantpuram.

Brief Objectives of EFT : -

 (1) Establishment of an Electronic Funds Transfer System to facilitate an efficient, secure, economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India,

2) To relieve the stress on the existing paper based funds transfer and clearing system.

The major users of EFT were the Government Departments. Railways and Defence supplier payments were all routed through EFT.

In fact, EFT could have been discontinued a long time back, but as modifications were required in the Government Deparment’s IT, EFT was still being continued.

However, from 2011, EFT is no longer live.

QUOTE

Important announcement: Since the number of transactions being put through EFT has reduced drastically and the usage of NEFT has picked up and number of transations under NEFT is going up every day, it has been decided to discontinue EFT with immediate effect. The payments being made through EFT may be routed either through NEFT (wherever available) or through ECS/Regional ECS. If none of these is feasible, DDs may be issued in the interregnum.

UNQUOTE