What is NEFT system and How it works?

National Electronic Funds Transfer (NEFT) is a one to one fund transfer system. It is a nation-wide payment system facilitating electronic money transfer to any individuals, firms or corporate from any bank branch. The NEFT system also facilitates the Indo-Nepal Remittance Facility Scheme. it is a one-way cross-border transfer of funds from India to Nepal. A remitter can transfer funds from any of the NEFT-enabled branches in India to Nepal, irrespective of whether the beneficiary in Nepal maintains an account with a bank branch in Nepal or not.

How does NEFT Money Transfer work?

Step-1: An individual/ firm/corporate who wants to transfer funds through NEFT has to fill an application form providing details of the and the amount to be remitted. Some banks offer the NEFT facility even through the ATMs.

Step-2: The originating bank branch prepares a message and sends the message to its pooling center (also called the NEFT Service Centre).

Step-3: The pooling center forwards the message to the NEFT Clearing Centre to be included for the next available batch.

Step-4: The Clearing Centre sorts the funds transfer transactions destination bank-wise and prepares to account entries to receive funds from the originating banks (debit) and give the funds to the destination banks (credit). Thereafter, bank-wise remittance messages are forwarded to the destination banks through their pooling center (NEFT Service Centre).

Step-5: The destination banks receive the inward remittance messages from the Clearing Centre and pass on the credit to the beneficiary customers’ accounts.

How to transfer funds through NEFT?

Transferring funds online is a two-part process

• Adding Beneficiary
• Transferring money

Adding Beneficiary

Step 1-Log on to bank website.

Step 2-In Profile tab and Go to Manage Beneficiary link. Select Inter Bank Payee from the options provided.

Step 3-Select ‘Add’ option and provide the Beneficiary details.

Step 5-Enter the IFSC code of the beneficiary bank branch

Find your bank branch IFSC Code

Step 6-Click the ‘accept Terms of Service (Terms & Conditions)’ button followed by ‘confirm’.

Step 7-A high-security password is sent to the mobile number as an additional security measure. Enter this password to authorize the beneficiary.

The beneficiary added is activated in a maximum of 16 hrs time.

Transferring money

Step 1-Select the ‘Inter Bank Transfer’ link in the ‘Payments/Transfers’ tab.

Step 2-Select the Transaction Type to NEFT.

Step 3-The list of beneficiary accounts added is displayed.

Step 4-Enter the Amount and select the beneficiary to be credited from the list.

Step 5-Click on ‘accept Terms of Service (Terms & Conditions)’ and confirm.

The process of online method will be more or less same and may vary depending on the bank.

FAQ’s on NEFT