Come July 10, 2017 and a new era
will commence in India’s ePayment system. Buoyed by the increase of volumes in
NEFT, Reserve Bank of India has introduced additional NEFT settlement batches
In
NEFT, the funds transfer happen in batches as compared to real-time in RTGS or
as the full form suggests Real Time Gross Settlement.
Under
NEFT, settlement takes place with all transactions received till the Particular
cut-off time in a particular batch.
After
the introduction of 11 additional NEFT settlements, the total number will
increase to 23 at half hourly settlement batches during the day. Currently
there are twelve settlements from 8 am to 7 pm at hourly intervals.
The
overall NEFT timings - between 8.00 am and 7.00 pm - will remain the same as
earlier.
The
more number of settlement batches means that the fund transfer will happen at a
quicker pace. This will improve the efficiency and add to customer convenience,
the RBI said. However, the timings that the banks follow may vary depending on
the customer timings of the bank branches.
The
minimum amount which can be remitted through NEFT is INR 1. The maximum amount
is restricted to the amount available in the originators bank account.
Through
the additional 11 batches, the transfer is almost instantaneous.
"The
half hourly settlements would speed up the funds transfer process and provide
faster credit to the destination accounts," the RBI said in a
notification.
The
RBI has advised banks to carry out the required changes in their processing
system to initiate the NEFT transactions for half hourly settlements. They have
also been told to accept and credit the inward NEFT transactions on half hourly
basis. Customers will also get a confirmation SMS once the transaction is
completed.
NEFT
online fund transfer to get faster from July 10 as settlement frequency doubles
The
Reserve Bank of India has decided to reduce clearance time for online money
transfers using the NEFT (National Electronic Funds Transfer) mechanism by
increasing the settlement frequency to every half-an-hour, from the existing
one hour.
Customers
having savings or current account are eligible to avail NEFT/ RTGS service.
Individuals who do not have a bank account can also deposit cash at the
NEFT-enabled branches. However, such cash remittances will be restricted to a
particular amount per transaction.
11 Benefits of NEFT to Corporates
Benefit NO
01:: Access to customers of
183 + Banks
Benefit NO 02:: Access to customers spread over the length
and width of India via 1,37,000+ Bank Branches
Benefit NO 03:: Special facility to receive Credit Card
dues. In case of payments towards Credit Card dues, customers have to key in the
16 Digit Credit Card Number as the Beneficiary's account number, the
Beneficiary's account type as 52 and the beneficiary bank's IFSC will be the
IFSC of the branch responsible for handing these card bill payments.
The
card issuing banks have to designate a branch for accepting such payments and
communicate the IFSC of the designated branch to their credit card customers.
Through
this facility the card holders can plan the payment date of their credit card
dues. They can schedule future dated
payments through their respective online banking tool.
Benefit NO 04:: Centralized Customer Facilitation
Centers facilitate quick resolution of queries.
Benefit NO 05:: Positive conformation by the Beneficiary
Bank.
The
main grouse of NEFT users was the non-availability of any conformation once the
beneficiary has received the customers. They were multiple complaints from corporate
that the beneficiaries did not receive the funds. In majority of the cases it
was noticed that the funds were received by the beneficaries, however in the absence
of any conformed messages, Banks were finding it difficult to respond to
queries. Hence, Reserve Bank of India
introduced the concept of “Acknowledgement / Positive Confirmation by the Beneficiary
Bank”. This step was welcomed by the Users and led to increase in the NEFT
volumes.
How
does the “Positive Conformation”, work?
·
The originator
has to indicate his/her mobile number or email id in the NEFT Application while
initiating the transaction. Usually, the customers’ mobile number and email id
is picked up from the CBS Module.
·
After
successfully crediting the Beneficiary's account, the beneficiary bank will
send a Credit Acknowledgement message indicating “credited to customers'
account” to the originating bank through NEFT Service Centre.
·
The
originating banks after receiving the positive confirmation message from the
beneficiary bank, initiates a mobile SMS or generate an e-mail to the
originator to convey the fate of the transaction.
Basing
on customization for corporate customers, this positive conformation message
can be part of the MIS available in the corporate banking website.
Benefit NO 06:: Return
Transactions are highlighted with special narration in the customers statement
of account. The originating bank has to provide
the description “NEFT-Return” in the pass book / account statement of the
originator whose NEFT transaction is returned.
Benefit NO 07:: Standard narration in Beneficiary’s
statement of bank account . Another main grouse from the beneficiaries was improper
narration in the statement of bank account. To minimize such complaints,
Reserve Bank of India has advised all Banks to provide standard narration for
NEFT Credits.
After
crediting the account of the beneficiary, the beneficiary bank has to advise
the beneficiary of the funds received.
The
Account Statement / Pass Book entry or any online messaging system shall
indicate briefly the source of funds as well.
For this purpose, the mandatory field 6091
which contains the remitter's name shall be picked up for the source of credit
and information contained shall be printed in the Account Statement / Pass
Book.
Banks
originating transactions shall ensure proper and meaningful details are
provided in this field. Description of field 6091 is :
M 6091
Sending customer a/c name
50x Sender's account name
Benefit NO 08:: Almost Real time credit to Beneficiary
account. The beneficiary branches have to make the payment to the beneficiaries
within two hours of batch settlement time by crediting the specified account of
the beneficiary or otherwise placing funds at the disposal of the beneficiary.
NEFT
presently functions with a Batch+2 (B+2) return cycle. The B+2 return
discipline requires banks to afford
credit to the beneficiaries' account immediately upon completion of a batch
else return the transactions within two hours of completion of the batch
settlement, if it is not possible to afford credits to the beneficiaries, for
any reason.
Therefore,
an inward credit message which is not returned within two hours from the time
at which the payment instructions are processed at NEFT Centre (B+2) is treated
to have been completed and credit afforded to the beneficiary's account by the
beneficiary branch. It is, therefore, vital that banks systems are geared to
credit within 2 hours of the batch or are re-transmitted back as return NEFT
transactions in the immediate next batch itself.
Benefit NO 09:: Corporates
can request their Banks to customize MIS, introduce additional filters before a
NEFT credit is transmitted. The concept of virtual accounts is very popular
amongst Corporates.
Benefit NO 10:: Reduce the reconciliation
time from few working days to few hours.
Benefit NO 11:: Be a partner of Reserve Banks of India ‘LessCash’
Mission.
Additional
Reading:
01
_ Kotak Life Insurance – Payment of Premium through NEFT
Make
premium payments through your bank account using National Electronic Fund Transfer
(NEFT). Log into your Net Banking, select the option NEFT transfer and enter
the below mentioned details:
Beneficiary
account -
99800KLIFExxxxxxxx
(The
number after KLIFE would be your 8 digit Policy Number)
For
example if your policy no is 00921500, the beneficiary account would be
99800KLIFE00921500
If
your Policy No is less than 8 digits, please add requisite number of zeroes
before the Policy No
Read
more at Premium Payment Options
02
_ SHORT-TERM TRANSACTIONS FORECASTING USING TIME SERIES ANALYSIS: A CASE STUDY
FOR INDIA
03
_ Optimising Commissions and Payout Mechanism For G2P Payments
Under Electronic and Direct Benefit Transfer
04
_ Piloting Basic Income Transfers
in Madhya Pradesh,India
