Context-Giving a big boost to digital funds movement, the Reserve Bank of India (RBI) on Monday operationalised round-the-clock (24 X 7 basis) availability of the National Electronic Fund Transfer (NEFT) and asked the banks not to levy any charges on NEFT transfer from savings bank account holders.

• Customers can now transfer money through NEFT without paying any charges any time of the day whereas banks charge a fee for fund transfer through cheques and demand draft (DD)

NEFT

• The acronym “NEFT” stands for National Electronic Funds Transfer. It is an online system for transferring funds from one financial institution to another within India usually the banks). The system was launched in November 2005,

Difference between NEFT and RTGS

• Though both NEFT and RTGS are for fund transfer arrangements, both differ considerably in operation. NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes place with all transactions received till the particular cut-off time. These transactions are netted (payable and receivables) in NEFT. This means that transactions are settled in batches under net.
• Under RTGS the transactions are settled individually. 
• The NEFT platform is primarily aimed for small value transactions. 

How much can be transferred?

• There is no ceiling on the minimum or maximum amount that can be transferred through NEFT. You can even transfer Re 1. However, a minimum of Rs 2 lakh must be transferred through the RTGS service. There is no cap on the maximum amount, though. However, banks may restrict the amount you can transfer in one day