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Remittances to India FAQs

1. What is NEFT System?

The acronym “NEFT” stands for National Electronic Funds Transfer. It is a nation-wide system that facilitates Funds transfer from any bank branch to any other participating bank branch in India using RBI's NEFT service. RBI acts as the service provider and transfers the credit to the other bank's account.

2. Are all bank branches in the system part of the funds transfer network?

As at end-November 2009 as many as 62,000 branches / offices of 94 banks in the country (out of around 75,000 bank branches) are NEFT-enabled.

3. What is the funds availability schedule for the beneficiary?

The beneficiary can expect to get credit either on the same day or on the next working day morning depending on the time of settlement and time taken by the beneficiary bank to process the payment. 

4. How does the NEFT system operate?

  • Step-1: The remitter fills in the application form available on Mashreq Online giving the particulars of the beneficiary (bank-branch, beneficiary's name, account type and account number).
  • Step-2: The bank prepares a Structured Financial Messaging Solution (SFMS) message and sends it to its Service Centre for NEFT.
  • Step-3: The pooling centre forwards the message to the NEFT Clearing Centre (operated by National Clearing Cell, Reserve Bank of India, Mumbai) to be included for the next available batch. There are eleven hours settlement starting from 9 am to 7 pm on all week days and five hourly settlements from 9 am to 1 pm on Saturdays.
  • Step-4: The RBI at the clearing centre sorts the transactions bank-wise and prepares accounting entries of net debit or credit for passing on to the banks participating in the system. Thereafter, bank-wise remittance messages are transmitted to banks.
  • Step-5: The receiving banks process the remittance messages received from RBI and credit the beneficiaries' accounts.

5. How is this NEFT System an improvement over the existing RBI-EFT (Electronic Funds Transfer) System?

The RBI-EFT system is confined to the 15 centers where RBI is providing the facility, where as there is no such restriction in NEFT as it is based on the centralized concept. The system also uses the state-of-the-art technology for the communication, security etc, and thereby offers better service. 

6. How is it different from RTGS (Real Time Gross Settlement) and EFT?

NEFT is an electronic payment system to transfer funds from any part of country to any other part of the country and works on Net settlement, unlike RTGS that works on gross settlement and EFT which is restricted to the fifteen centers only where RBI offices are located. (Any customer payment up to Rs. 1,00,000/- and less can not be routed through RTGS)