Electronic Fund Transfer System¶
Electronic Fund Transfer (EFT) is a system that facilitates the electronic transfer of money from one bank account to another without the need for paper money to change hands. EFT transactions are known for being safe, secure, and efficient. There are several methods through which EFT can be carried out, including RTGS, NEFT, and IMPS, which are popular in India. Here's a detailed comparison and explanation of these systems:
| Parameter | RTGS | NEFT | IMPS |
|---|---|---|---|
| Minimum Amount | INR 2,00,000 | No minimum limit | No minimum limit |
| Timing | 7:00 AM to 6:00 PM on working days | Hourly batches from 8:00 AM to 7:00 PM on working days | 24x7, including holidays |
| Settlement | Real-Time, Individual transactions | Batch-wise | Real-Time, Individual transactions |
| Transaction Speed | Instant | Slight delay due to batch processing | Instant |
| Usage | High-value transactions | Small to medium value, non-urgent transactions | Small value, anytime, urgent transactions |
| Accessibility | Through bank's net banking or in-branch | Through bank's net banking or in-branch | Multiple channels: Mobile, Internet, ATM, SMS |
| Upper Limit | No upper limit | Usually up to INR 50,00,000 (may vary between banks) | Usually up to INR 2,00,000 (may vary between banks) |
1. RTGS (Real-Time Gross Settlement)¶
RTGS is designed for high-value transactions, and the transfers are processed in real-time, which means the transactions are processed instantly on an individual order basis without any waiting period.
- Minimum Amount: The minimum amount for an RTGS transaction is INR 2,00,000 with no upper limit.
- Timing: RTGS services are available from 7:00 AM to 6:00 PM on working days.
- Settlement: Transactions are settled individually, making it a faster but more resource-intensive process.
- Usage: Ideal for transferring large amounts of money securely and instantly.
Example: Transferring a large sum like INR 10,00,000 for a property transaction using RTGS to ensure it reaches the recipient instantly.
2. NEFT (National Electronic Funds Transfer)¶
NEFT facilitates the transfer of funds from one bank to another but unlike RTGS, the transfers are processed in batches during specific timings.
- Minimum Amount: No minimum amount limit, making it suitable for small to medium transactions.
- Timing: NEFT operates in hourly batches from 8:00 AM to 7:00 PM on working days.
- Settlement: Transactions are settled in batches, which may lead to a slight delay, but it's less resource-intensive compared to RTGS.
- Usage: Suitable for non-urgent, small to medium value transactions.
Example: Paying a monthly rent of INR 20,000 through NEFT transfer.
3. IMPS (Immediate Payment Service)¶
IMPS provides an instant, 24x7, interbank electronic fund transfer service that can be accessed through various channels like Mobile, Internet, ATM, SMS, etc.
- Minimum Amount: No minimum amount limit, making it suitable for small value transactions.
- Timing: Available 24x7, including holidays, making it the most flexible option.
- Settlement: Transactions are processed instantly on a real-time basis.
- Usage: Ideal for small value, anytime, urgent transfers.
Example: Paying a friend INR 1,000 instantly for a shared meal using IMPS.
Summary¶
- Speed: RTGS and IMPS are real-time transfer systems, while NEFT operates in hourly batches.
- Transaction Value: RTGS is meant for high-value transactions with a minimum limit of INR 2,00,000. NEFT and IMPS have no minimum limit, making them suitable for smaller transactions.
- Availability: IMPS is available 24x7, while RTGS and NEFT are available only during specified hours on working days.
Each of these transfer systems caters to different transaction needs, ensuring that individuals and businesses can move funds securely and efficiently based on their specific requirements.