Definition

National Electronic Funds Transfer (NEFT)

National Electronic Funds Transfer (NEFT) is an Indian system of electronic transfer of money from one bank or bank branch to another.

The banks or their branches that support such transactions have to participate in the NEFT network. An updated list of banks and branches that are NEFT-enabled can be found on the Reserve Bank of India (RBI) website.

The transfer of money from the customer remitting it to the beneficiary account usually takes place on the same day. Settlement or clearance of funds takes place in batches as specified by the guidelines by the RBI. Any amount of money can be transferred using NEFT, making it usually the best method for retail remittances. Customers with Internet banking accounts can use the NEFT facility to transfer funds nationwide on their own. Funds can also be transferred via NEFT by customers by walking into any bank branch (which is NEFT-enabled) and leaving relevant instructions for such transfer - either from their bank accounts or by payment of cash. Transfer of funds to Nepal using NEFT, is also allowed subject to limits.

In order to make a remittance via NEFT, the customer initiating the transfer needs to have the IFSC (Indian Financial System Code) of the bank branch where the beneficiary account is located. IFSC is an alphanumeric 11-digit code that functions as a unique address for a particular branch. Customers will also need to input the beneficiary account number and name as well as the name of the bank being transferred to.

This was last updated in September 2012
Posted by: Margaret Rouse

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