The Internet brought technical development, resulting in several modifications to how banking was conventionally practised. As e-commerce opportunities grow, most banks offer electronic fund transfer services for convenient and hassle-free transactions.
Through this mechanism, users are able to transfer funds through their computers or smart phones via the Internet. A major advantage of these services is that funds are transferred immediately within the same bank or between different bank accounts.
Here are the three most popular money transfer services offered by banks.
National Electronic Fund Transfer (NEFT)
This type of transfer requires a destination and a transferring bank. The Reserve Bank of India (RBI) maintains a centralised database for all banks and their branches. As a result, almost every bank in the country is able to provide NEFT services. Users must register the beneficiaries (recipients) to transfer money. This electronic fund transfer method may be executed on all days and at any time except Sundays. Transactions are settled in 12 batches as specified by the RBI between 8 am and 7 pm on weekdays. Moreover, settlements on Saturdays are done in six batches between 8 am and 1pm. A maximum amount of INR 10 lakh may be transferred through NEFT.
Real Time Gross Settlement (RTGS)
This online money transfer is executed in real time without any waiting period. The payment gateway is maintained by the RBI and is used to electronically transfer funds between banks. There is no limit on the amount that may be transferred through RTGS. However, users need to transfer at least INR 2 lakh (with no maximum limit) through this mode. Users may register the beneficiaries through Internet banking with details, such as recipient name, account number, bank address, and Indian Financial System Code (IFSC) of the receiving bank. When the transfer is successfully executed, the recipient and remitting banks provide the details to their respective customers.
Immediate Payment Service (IMPS)
Most electronic fund transfers occur through NEFT or RTGS. However, these occur in batches, which may result in some delays. To overcome this, the National Payments Corporation of India (NPCI) introduced the Immediate Payment Services (IMPS). This service is available to Indians and allows users to conduct money transfers online through their mobile handsets. The interbank transfer service is available on all days for 24 hours. Users may access their bank accounts through their mobile phones and transfer funds between banks and accounts. Additionally, IMPS offers a secure transfer gateway with immediate confirmation of executed transactions. This service is available through SMS facility or mobile banking. Users must register with their banks for this money transfer service in order to transfer money through IMPS. They receive a Mobile Money Identifier (MMID) and MPIN. These are then used for transferring to various beneficiaries. It is necessary for the beneficiaries to link their mobile number to their bank accounts to obtain the MMID and receive the funds.
Online money transfer is convenient and allows users to execute transactions without visiting the branch. Such transfers feels doorstep banking are executed through safe and secure payment gateways and entail no risks. Furthermore, money is immediately debited from the sender’s account and credited to the recipient’s account. This significantly reduces the time and efforts needed to transfer money. Another benefit of conducting money transfer online is that the possibility of errors is reduced as the transaction is completed only when accurate details are provided by the users.