Go AD-Free with CAclubindia Pro and get a FREE CCI Coffee Mug. Subscribe Now!

Neft / rtgs

PlayStore (Article) (88 Points)

12 December 2014

What is the difference between NEFT and RTGS?

Reply
Follow
Share

5 Replies

CA Sayli Jain (CA) (173 Points)
Replied 12 December 2014

both NEFT & RTGS are online payment mode.. RTGS is faster way for payment.. there is a specific limit, after crossing such limit only then you can pay through RTGS...you are required to pay more in RTGS as bank chrges

Upgrade to CAclubindia Pro. Subscribe Now!

CA Saloni (Manager-Accounts & GST Consultant) (5124 Points)
Replied 12 December 2014

Upto 2 lacs it is NEFT(national electronic fund transfer)

Above that it is RTGS(real tinme gross settlement)

PlayStore (Article) (88 Points)
Replied 12 December 2014

Thank you so much gentleladies :)

Arpit Shah (Accountant) (21438 Points)
Replied 12 December 2014

RTGS Vs NEFT :

Thus, we can say that both RTGS and NEFT are schemes started by RBI for the benefit of the customers which allow accounts holders in the banks to electronically transfer the funds intra-bank. In the case of RTGS, settlement in on 'Real Time' basis whereas in case of NEFT the settlement in on batch basis and net basis. There are some other rules, regulations and differences, which we will be discussing below:-

What are the minimum and maximum amount of remittance under RTGS and NEFT :

RTGS NEFT

Minimum Amount : RS 2 lakhs No minimum limit

Maximum Amount : No upper ceiling No upper ceiling

(However, maximum amount per transaction is limited to Rs.50,000/- for cash-based remittances and remittances to Nepal.)

What are the operating hours of RTGS and NEFT ?

RBI has prescribed the following operating hours for NEFT : Presently, NEFT operates in hourly batches - there are twelve settlements from 8 am to 7 pm on week days (Monday through Friday) and six settlements from 8 am to 1 pm on Saturdays.

RBI has prescrbed the following operating hours for RTGS : The RTGS service window for customer's transactions is available from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 13.30 hours on Saturdays for settlement at the RBI end.

However, remember that the timings of both RTGS and NEFT at the bank can vary depending on the customer timings of the bank branches. Moreover, normally, banks close their own window for accepting the transactions, about 15 minutes before the above time as to allow them to put the transaction in the system so that it reaches by the upper time limit at the RBI window. Thus, for each bank / branch the above timings may sometimes vary.

What are the processing / service Charges for RTGS and NEFT transactions :

RTGS : (a) Inward Transactions : Free, no charge to be levied;

(b) Outward Transactions: Rs 2 lakh to Rs 5 lakh - Not exceeding Rs 30 per transaction; Above Rs 5 lakh - not exceeding Rs 55 transactions;

NEFT :

a) Inward transactions at destination bank branches (for credit to beneficiary accounts) - Free, no charges to be levied from beneficiaries

b) Outward transactions at originating bank branches – charges applicable for the remitter

- For transactions up to Rs 10,000 : not exceeding Rs 2.50 (+ Service Tax)

- For transactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Service Tax)

- For transactions above Rs 1 lakh and up to Rs 2 lakhs: not exceeding Rs 15 (+ Service Tax)

- For transactions above Rs 2 lakhs: not exceeding Rs 25 (+ Service Tax)

How Much Time it takes to transfer the funds through RTGS? I do not see that transfer takes place on real time basis?

In terms of the procedure as laid down by RBI, the beneficiary branches are expected to receive the funds on real time basis i.e. as soon as funds are transferred by the remitting bank. However, there are delays due to processing at the remitting and receiving bank. RBI has allowed the beneficiary banks to credit the beneficiary's account within two hours of receiving the funds transfer message. Thus, we do not see the transfers on real time basis and there are some delays. It is hoped that slowly this time will get reduced as more and bank and branches improve their internal transfer system.