NEFT(National Electronic Fund Transfer)

NEFT
 National Electronic Funds Transfer (NEFT) is a nation-wide
centralized payment system owned and operated by the
Reserve Bank of India (RBI).
 Individuals, firms and corporates maintaining accounts with
any member bank can electronically transfer funds to any
individual, firm or corporate having an account with any
other bank in the country
 The NEFT system is available round the clock throughout
the year on all days, i.e., on 24x7x365 basis
 NEFT presently operates in batches on half-hourly intervals
throughout the day
 NEFT
 There is no limit imposed by the RBI for funds transfer through NEFT system
 A person who does not have a bank account can remit funds through NEFT to
a beneficiary to a maximum of 50,000 per transaction
 NEFT can be used to transfer funds from / to NRE and NRO accounts in the
country under the provisions of the Foreign Exchange Management Act, 2000
(FEMA) and Wire Transfer Guidelines.
 A timeline of two hours from the batch settlement can be expected, within
which beneficiary's account should be credited
 If it is not possible to afford credit to the account of the beneficiary for any
reason, destination banks are required to return the transaction (to the
originating branch) within two hours of completion of the batch
 If the NEFT transaction is not credited or returned within two hours after batch
settlement, then the bank is liable to pay penal interest to the affected
customer at the current RBI LAF(Liquidity Adjustment Facility) Repo
Rate(Currently 4.90%) plus two percent for the period of delay / till the date of
credit or refund.
 HOW DOES NEFT OPERATE
 Customer raises NEFT request either ONLINE/OFFLINE.
The originating bank prepares a message and sends the message to its
pooling centre, also called the NEFT Service Centre
The pooling centre forwards the message to the NEFT Clearing Centre,
operated by the RBI, to be included for the next available batch.
The Clearing Centre sorts the funds transfer transactions beneficiary bank-
wise and prepares accounting entries to receive funds from the originating
banks (debit) and give the funds to the beneficiary banks (credit)
Thereafter, bank-wise remittance messages are forwarded to the
beneficiary banks through their pooling centre (NEFT Service Centre).
The beneficiary banks receive the inward remittance messages from the
Clearing Centre and pass on the credit to the beneficiary customers'
accounts
 CHARGES FOR NEFT TRANSFER
 There are no charges levied on the remitting/beneficiary bank by RBI for
both outward/inward transaction of funds for debiting/crediting their
Bank’s customer account.
 No Charges to be levied from the saving account of the account holders
for ONLINE NEFT fund transfer w.e.f.01.01.2020
 The maximum charges which originating bank can be levy from its
customers for other outward transactions, if they so desire, are given
below :-
1. For transactions up to 10,000 : not exceeding 2.50 (+ Applicable GST)
2. For transactions above 10,000 up to 1 lakh : not exceeding 5 (+
Applicable GST)
3. For transactions above 1 lakh and up to 2 lakhs : not exceeding 15 (+
Applicable GST)
 FUND TRANSFER THROUGH NEFT TO
ABROAD
 The outbound remittances through NEFT system are permitted only to
Nepal (one way only) under Indo-Nepal Remittance Facility (INRF)
Scheme.
 Under this Scheme, the remitter can transfer funds from India to Nepal,
irrespective of whether the beneficiary in Nepal maintains an account
with a bank branch in Nepal or not.
 The beneficiary would receive funds in Nepalese Rupees
 One can remit upto ₹2 lakhs per transaction to the beneficiary residing in
Nepal
 Walk-in / Non-customer can remit upto ₹50,000 per transaction to Nepal
residing beneficiary
 There is no limit on remittances if the sender is maintaining account.
 Walk-in / Non-customers are allowed to remit 12 remittances in a year
 FUND TRANSFER THROUGH NEFT TO
ABROAD
 In Nepal, the INRF Scheme is handled by Nepal SBI Ltd. (NSBL)
 If the beneficiary is not having account with NSBL, an arrangement has
been entered into by NSBL with a money transfer company in Nepal (called
Prabhu Money Transfer) who would make arrangements for delivery of
cash (in Nepalese Rupees)
 For transactions up to ₹50,000, the charges are as follows:
1. Originating bank – Maximum ₹5/- per transaction.
2. State Bank of India – ₹20/- per transaction. SBI would share this ₹20/-
with NSBL at ₹10 each.
3. In case the beneficiary does not maintain an account with NSBL then, an
additional amount would be charged- ₹50/- for remittances up to ₹5,000/-
and ₹75/- for remittance above ₹5,000/-.
4. For transactions above ₹50,000/-, charges prescribed by SBI shall apply.
 LEGAL ENTITY IDENTIFIER
 The Legal Entity Identifier (LEI) is a 20-character
alpha-numeric code used to uniquely identify
parties to financial transactions worldwide
  It can be obtained from any of the Local Operating
Units (LOUs) accredited by the Global Legal Entity
Identifier Foundation (GLEIF)
 In India, LEI can be obtained from Legal Entity
Identifier India Ltd. (LEIL)- a wholly owned subsidiary
of The Clearing House Corporation of India
 NEFT TRANSFER BY LEI
 All single payment transactions of ₹50 crore and above undertaken by
entities (non-individuals) should include remitter and beneficiary LEI
information
 This is applicable to transactions undertaken through the NEFT and RTGS
payment systems
 It is not necessary for Governments or their Departments / Ministries to
obtain LEI or mention LEI number for payment transactions in NEFT and RTGS
 However, Corporations / Undertakings, including those fully owned by the
Government, shall need to obtain LEI. 
 LEI is not required for customer transactions where both remitter and
beneficiary are individuals
 For transactions, where either or both parties are non-individual/s, LEI will be
required.