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NEFT full form: how National Electronic Funds Transfer works
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NEFT stands for National Electronic Funds Transfer. It is a nationwide system, run by the RBI, that lets you move money from your bank account to any other bank account in India that is part of the network. It started in November 2005 and has been available 24 hours a day, every day of the year since 16 December 2019.
How it works
NEFT is a deferred net settlement system. Instead of settling each payment instantly, it collects payments and settles them in half-hourly batches through the day. The paying bank sends the instruction, the RBI settles the net position of banks at the end of the batch, and the beneficiary's bank must credit the account within two hours of the batch settlement. To send money, you need the beneficiary's name, account number and the IFSC of the branch. The IFSC is an 11-character code: four letters for the bank, a zero, and six characters for the branch.
NEFT vs RTGS vs IMPS
| Point | NEFT | RTGS | IMPS |
|---|---|---|---|
| Operated by | RBI | RBI | NPCI |
| Settlement | Batches (deferred net) | Real time, gross, one by one | Instant |
| Minimum amount | None | ₹2 lakh | None |
| Available | 24x7 | 24x7 | 24x7 |
| Best for | Everyday transfers | Large-value payments | Small, urgent transfers |
The RTGS minimum has been ₹2 lakh since the system began, per the RBI's payment systems rules (rbi.org.in; confirm for any change), and per-transaction limits for NEFT are set by each bank for each channel. Real-time payment through your phone is covered under UPI.
Where it fits among payment systems
NEFT and RTGS are the two systems the RBI runs itself, while IMPS and UPI are run by NPCI. Cheque clearing is a separate track, described under the cheque truncation system.
How bank exams ask about it
Common stems: "NEFT stands for", "NEFT operates in", "which system settles in batches", "RTGS is meant for", and a difference between NEFT and RTGS. Time-related questions used to ask about the 8 am to 7 pm window; the 24x7 change is the current answer. This belongs with the other digital payment questions in banking awareness.
Where to check
The RBI's payment systems pages at rbi.org.in set out the rules, timings and charges.
Frequently asked questions
Is NEFT free?
Banks set their own customer charges, which differ between online and branch channels. Check your bank's schedule of charges.
Can I cancel a NEFT transfer?
Not once it is in a settled batch. If the account number was wrong, contact your bank at once so it can ask for a return.
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- RTGSRTGS is the RBI system for large-value payments settled one by one in real time and final once sent. Full form, minimum amount, timings and exam facts.
- IMPSIMPS lets you transfer money between bank accounts instantly, 24x7, including bank holidays, using a mobile number and MMID or account number and IFSC.
- UPIUPI is NPCI's instant payment system that lets you send money from your bank account using a virtual payment address and a UPI PIN. How it works and exam facts.
- Cheque truncation systemCTS clears cheques using electronic images and data instead of moving paper. Meaning, how it works, MICR code, benefits, Positive Pay and exam facts.
- KYCKYC (Know Your Customer) is the identity and address check banks must do before opening an account. Meaning, officially valid documents, e-KYC, V-CIP and CKYC.
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