Governement of India
Digital India
Money Transaction in Digital Formats
VARIOUS MODES OF ELECTRONIC FUND
TRANSFERS
Gone are the days when the payment
and funds transfer sources were limited to physical methods such as
direct currency exchange or a written cheque method. With the
emergence of internet and mobile banking and the emerging e-commerce
opportunities, banks too have marched ahead with introducing the
concept of electronic funds transfer, which is much more convenient
and hassle free.Today, electronic funds transfer allow you to
exchange funds between individuals as well as organizations via
electronic gateways which can be accessed using internet, computers
and smart phones. Funds can be transferred instantly from one account
to another, either within the same bank or to a different bank
network at any given time.
Why is electronic transfer
preferred?
Electronic funds transfer is a
much more preferred money transferoptionas it allows customersto make
money transfers at the comfort of their homes using integrated
banking tools such as internet and mobile banking.
Besides being convenient,
electronic transfer modes are considered to be safe, secure and make
transferring money much simpler. Electronic transfers are processed
immediately withthe transferredamount being deducted from one account
and credited to the other in real time, thus saving time and effort
involved in physically transferring a sum of money. Opting for
electronic transferring system also reduces the possibilities of any
mistakes as a transaction is only authorized with complete details
which include the correct account number of the beneficiary and the
target bank’s specific IFSC code.
How do you transfer funds?
Transferring funds via electronic
gateway is much simpler than the conventional methods. You can choose
to:-
Transfer funds into your own
linked accounts of the same bank network.
Transfer funds into different
account of the same bank.
Transfer funds into different
bank’s accounts using NEFT.
Transfer funds into other bank
accounts using RTGS
Transfer funds into various
accounts using IMPS.
Types of electronic funds
transfer?
NEFT or National Electronics Funds
Transfer
RTGS or Real Time Gross Settlement
IMPS or Immediate Payment Service.
NEFT
The National Electronic Funds
Transfer is a nation-wide money transfer system which allows
customers with the facility to electronically transfer funds from
their respective bank accounts to any other account of the same bank
or of any other bank network. Not just individuals but also firms and
corporate organizations may use the NEFT system to transfer funds to
and fro.
Funds transfer through NEFT
requires a transferring bank and a destination bank. With the RBI
organizing the records of all the bank branches at a centralized
database, almost all the banks are enabled to carry out an NEFT
transaction. Before transferring funds via NEFTyou register the
beneficiary, receiving funds. For this you must possess information
such as name of the recipient, recipient’s bank name, a valid
account number belonging to the recipient and his respective bank’s
IFSC code. These fields are mandatory for a funds transfer to be
authorized and processed.
Any sum of money can be
transferred using the NEFT system with a maximum cap of Rs. 10, 00,
000.
NEFT transactions can be ordered
anytime you want, even on holidays except for Sundays which are
designated bank holidays. However, the transactions are settled in
batches defined by the Reserve Bank of India depending upon specific
time slots. There are 12 settlement batches operating at present
between the time slot of 8am to 7 pm on weekdays and from 8 am to 1pm
on Saturdays with 6 settlement batches.
RTGS
Real Time Gross Settlement as the
name suggests is a real time funds transfer system which facilitates
you to transfer funds from one bank to another in real time or on a
gross basis. The transaction isn’t put on a waiting list and
cleared out instantly. RTGS payment gateway, maintained by the
Reserve Bank of India makes transactions between banks
electronically. The transferred amount is instantly deducted from the
account of one banks and credited to the other bank’s account.
Users such as individuals,
companies or firms can transfer large sums using the RTGS system. The
minimum value that can be transferred using RTGS is Rs. 2 Lakhs and
above. However there is no upper cap on the amount that can be
transacted.
The remitting customer needs to
add the beneficiary and his bank account details prior to transacting
funds via RTGS. A beneficiary can be registered through your internet
banking portal. The details required while transferring funds would
be the beneficiary’s name; his/her account number, receiver’s
bank address and the IFSC code of the respective bank.
On successful transfer the Reserve
Bank of India acknowledges the receiver bank and based on this the
both the remitting bank as well as the receiving bank may/ may not
notify the customers.
IMPS
Majority of the funds transferred
using electronic channels are processed via NEFT or RTGS. But as the
funds could only be cleared in batches using these transfer gateways,
the National Payments Corporation of India introduced a pilot mobile
payment project also known as the Immediate Payment Service (IMPS).
Available to Indian public, IMPS offers instant electronic transfer
service using mobile phones. IMPS interbank transfer service is
available 24X7 and allows you to use your mobile phones to access
your account and to authorize transfer of funds between accounts and
banks. The IMPS service also features a secure transfer gateway and
an immediate confirmation on fulfilled orders.
IMPS is offered on all the
cellular devices via Mobile Banking or through SMS facility.
To be able to transfer money via
IMPS route you must first register for the immediate payment services
with your bank. On obtaining the Mobile Money Identifier (MMID) and
MPIN from the bank you can login or make a request via SMS to
transfer a certain amount to a beneficiary. Meanwhile the beneficiary
must link his/her mobile number with his/her respective account and
obtain the MMID from the bank to be able to receive money.
To initiate a transfer you must
enter the beneficiary’s mobile number, beneficiary MMID, the
transfer amount and your MPIN while requesting the fund transfer. As
soon as the transaction is cleared, you receive a confirmation SMS on
deduction from your account and the money credited into the
beneficiary’s account. The transaction reference number can be
noted for future reference.
Thus IMPS enables customers to use
mobile instruments as an instant money transfer gateway, facilitating
user convenience and saving time and effort involved in other modes
of transfer.
The differences
There is no cap on the minimum
value that can be transacted via NEFT. RTGS system however only
process transactions of a value starting from Rs. 2 Lakhs and above
as it caters to gross settlements.
While the NEFT system settles
transactions in batches, RTGS option transfer funds in real time.
Using NEFT if a transfer order is received after the defined cut-off
time, the transaction will have to wait until the next clearance to
be fulfilled whereas RTGS transactions are processed continuously
throughout the RTGS business hours.
IMPS stands out as the most
convenient and instant mode of money transfer, allowing transfer of
money across various accounts and banks on the go using a mobile
device.
Digital Payment: Click here
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