NEFT – New Settlement Batch @ 8.00am
This is with reference to the new NEFT feature of T+2 hours settlement cycle.
The T+2 hours settlement cycle means that the Beneficiary Bank has to credit the respective accounts within 2 settlement cycles or Return, in case the credit cannot be afforded.
Why cannot some NEFT Transactions be credited to the beneficiaries account?
The primary reasons are
- Invalid Beneficiary Account Number
- Incorrect Beneficiary Name I.e There is a mis-match in the Beneficiary name as mentioned in the NEFT Transaction and the Beneficiary's name in the Bank Account.
The Secondary reasons are:-
- Account Closed
- Credit Restrictions in the account for eg: No-Frills account.
- Account does not exist, credit meant to A Bank Account is sent to B Bank Account !!
Do all NEFT transactions require the T+2 hours settlement window ?
In my opinion no. Any business transaction has a normal processing cycle and a quick processing cycle.
This is visible in every sphere of life
Railways-Sleeper and AC,
Temple Darshan – Ordinary and VIP, based on the cost of the entry ticket.
Bank Accounts – Based on the Average Quarterly Balance – Additional features are offered
Cinema Tickets – Ordinary and Balcony.
Than why do all NEFT Transactions have to adhere to T+2hours Settlement Cycle.
There are many types of transactions which can have a different Settlement Cycle, than the T+2hours settlement cycle.
- Dividend Payouts
- Vendor Payouts
- Insurance company Payouts
- Etc
Hence, I suggest an additional Settlement Cycle. Any new suggestion has to be 01) Simple to understand
- Easy to implement
I propose the following new Idea:-
A new settlement cycle at 8.00am, for Bulk uploads. The Settlement Cycle for the 8.00am Batch, will be T+1 day.
In the 8.00am NEFT Settlement Cycle,
- Dividend Payouts
- Vendor Payouts
- Insurance company Payouts
- Etc
can be settled. As the transactions are not direct customer initiated, a little delay will not hurt any one and at the same time will boost the volumes in NEFT.
The T+2hours Settlement Cycle, is a wonderful concept and has many benefits in it.
But, I feel that the driver for NEFT Volumes, will be the bulk uploads viz Dividend Payouts, Vendor Payouts, Insurance company Payouts. Of course the individual transactions will constitute a major chunk of the overall NEFT Volumes.
