NEFT stands for National Electronic Fund Transfer is a specialized form of electronic transfer of money. In this transaction, you can transfer money from your bank account into the account of the receiver, irrespective of the bank that he/she is affiliated to. However, just by knowing what NEFT is, you will not understand what purpose it serves.
Here is a look at how to transfer funds using the NEFT procedure.
Steps to conduct NEFT transactions?
To initiate a NEFT transaction, you need to first visit your nearest bank branch.
Step 1. You need to ask for an NEFT application form when you reach your bank branch. Once you get the form, fill out the details of the beneficiary, including details of their bank account, bank name and other relevant information. The IFSC information will also be needed. Once the form is submitted, the bank will issue the transfer into the account of the beneficiary.
The procedure can also be completed online if you have net banking activated in your account. Some banks also allow NEFT transactions through their ATMs. However, if you do not have an account in the bank from which you wish to conduct the NEFT transaction, you would have to provide your phone number and address details, so that the bank can refund your money in case the payment does not go through the beneficiary’s account.
Step 2. The bank where you apply for the NEFT payment prepares a specialised message and sends the same to pooling centres, which are also known as NEFT service centres.
Step 3. The pooling centre sends the same message to the Reserve Bank operated NEFT clearing centre in Mumbai. As the message arrives, the clearing centre in Mumbai is given the clearance to include this transaction during the next batch.
Step 4. The clearing centre prepares for the funds to arrive from the originating bank and it also prepares to send the same fund over to the beneficiary’s account. Once this is complete, the messages regarding the remittance of the amount is forwarded from the NEFT service centres to both account holders.
In this manner, a NEFT payment is completed. Note that these transactions can be conducted during fixed hours each day. A charge is also levied on these transactions. The amount levied depends on the amount being transferred. However, these charges are limited and do not substantially affect the procedure of transaction.
Here is a look at how to transfer funds using the NEFT procedure.
Steps to conduct NEFT transactions?
To initiate a NEFT transaction, you need to first visit your nearest bank branch.
Step 1. You need to ask for an NEFT application form when you reach your bank branch. Once you get the form, fill out the details of the beneficiary, including details of their bank account, bank name and other relevant information. The IFSC information will also be needed. Once the form is submitted, the bank will issue the transfer into the account of the beneficiary.
The procedure can also be completed online if you have net banking activated in your account. Some banks also allow NEFT transactions through their ATMs. However, if you do not have an account in the bank from which you wish to conduct the NEFT transaction, you would have to provide your phone number and address details, so that the bank can refund your money in case the payment does not go through the beneficiary’s account.
Step 2. The bank where you apply for the NEFT payment prepares a specialised message and sends the same to pooling centres, which are also known as NEFT service centres.
Step 3. The pooling centre sends the same message to the Reserve Bank operated NEFT clearing centre in Mumbai. As the message arrives, the clearing centre in Mumbai is given the clearance to include this transaction during the next batch.
Step 4. The clearing centre prepares for the funds to arrive from the originating bank and it also prepares to send the same fund over to the beneficiary’s account. Once this is complete, the messages regarding the remittance of the amount is forwarded from the NEFT service centres to both account holders.
In this manner, a NEFT payment is completed. Note that these transactions can be conducted during fixed hours each day. A charge is also levied on these transactions. The amount levied depends on the amount being transferred. However, these charges are limited and do not substantially affect the procedure of transaction.
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