NEFT records 4.1 crore transactions on Feb 29, highest ever single-day volume

In a major milestone, the National Electronic Funds Transfer (NEFT) processed 4,10,61,337 transactions on February 29, marking the highest number of transactions processed in a day.

The Reserve Bank of India said that NEFT and Real Time Gross Settlement (RTGS) have registered a growth of 700% and 200% respectively and 670% and 104% respectively in terms of value in the last ten years (2014-2023).

Earlier, the RTGS system had processed its highest ever volume of 16.25 lakh transactions in a day on March 31, 2023.

What is NEFT?

NEFT is an electronic payment transfer system that enables interbank/inter-branch transfer within India. The transactions are processed in batches at half-hourly intervals. It is widely used for purposes such as salary payments, individual-to-individual transfers, business payments and more.

Advantages of NEFT

• Available on a 24x7x365 basis.
• Near-real-time funds transfer to the beneficiary account.
• All India coverage.
• Confirmation to the remitter by e-mail/SMS on credit to the beneficiary account.
• Penal interest provision for delay in credit or return of transactions.
• No charges to savings bank account customers for online NEFT transactions.
• The transaction charges have been capped by RBI.
• Can be used to clear credit card dues, loan EMI payment, inward foreign exchange remittances, etc.
• Available for one-way funds transfers from India to Nepal.

NEFT: How does it work?

• Step 1: An individual or firm willing to transfer funds through NEFT has to provide details of the beneficiary, such as the beneficiary's name, bank branch details, etc, on the Internet/mobile banking application. Funds can also be transferred by filling in the beneficiary details in the NEFT application form available at the bank branch.
• Step2: The originating bank prepares and sends a message to its pooling centre or the NEFT Service Centre.
• Step 3: The message is forwarded to the NEFT Clearing Centre to be included in the next available batch.
• Step 4: The Clearing Centre sorts the funds transfer transactions beneficiary bank-wise. It prepares accounting entries to receive funds from the originating banks and give them to the beneficiary banks.
• Step 5: The beneficiary banks receive the inward remittance messages from the NEFT Clearing Centre and pass the credit to the beneficiary customers' accounts.