When the country is facing cash crunch and ATMs are running dry, the common man is worried and has been reminded of demonetisation days. However, the Reserve Bank of India (RBI) and the government assured the public of no shortage of currency.
“Unusually large cash withdrawals” have lead ATMs in some places to run out of cash, the central bank said last week. However, as an alternative, banks provide several modes of transaction, which could come handy in situations like this. RTGS, NEFT and IMPS are some of the payment systems which facilitate fund transfers.
To know about RTGS, NEFT and IMPS fund transfers:
Real Time Gross Settlement (RTGS)
According to RBI, RTGS means continuous or real-time settlement of fund transfers individually on an order by order basis, without netting.
‘Real Time’ means the processing of instructions at the time funds are received, rather than at a later time; ‘Gross Settlement’ means the settlement of fund transfer instructions occurs individually, on an instruction by instruction basis. Considering that the funds settlement takes place in the books of RBI, the payments are final and irreversible.
Normally the beneficiary branches are expected to receive the funds in real-time as soon as they are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary’s account within 30 minutes of receiving the fund transfer message.
The RTGS system is basically meant for large value transactions. The minimum amount to be transferred through RTGS is Rs. 2 lakh. However, there is no upper limit on RTGS transactions.
One can access RTGS services from 9.00 to 16.30 on weekdays and from 9.00 to 14:00 on Saturdays for settlement at the RBI end. However, the timings of banks may vary depending on the customer timings of the bank branches.
The service charges levied by banks for offering funds transfer through RTGS system are:
Inward transactions (credit to beneficiary accounts) – Free, no charge to be levied.
Outward transactions at originating bank branches –
2 lakh to 5 lakh – Rs. 30 per transaction.
Above 5 lakh – Rs. 55.00 per transaction.
National Electronic Funds Transfer (NEFT)
According to RBI’s website, NEFT is a payment system facilitating one-to-one funds transfer. Under NEFT, one can electronically transfer funds from any bank branch to any individual, firm or corporate, having an account with any other bank branch in the country.
Individuals who do not have a bank account can also deposit cash using NEFT. However, such cash remittances are restricted to a maximum of Rs. 50,000 per transaction.
Settlement of fund transfer requests in the NEFT system is done on a half-hourly basis. There are twenty three half-hourly settlement batches which run from 8 am to 7 pm on all working days of the week (except 2nd and 4th Saturday of the month).
The receiver can expect to get the amount for the NEFT transactions within two business hours from the batch in which the transaction was settled.
However, NEFT has no limit – either minimum or maximum – on the amount of funds transferred.
The service charges levied by banks for offering funds transfer through NEFT are:
Inward transactions at destination bank branches (credit to beneficiary accounts) – Free, no charges to be levied.
Outward transactions at originating bank branches (charges applicable for the remitter or sender) –
For transactions up to Rs. 10,000 – Rs. 2.50 (plus GST applicable)
For transactions above Rs. 10,000 up to Rs. 1 lakh – Rs. 5 (plus GST applicable)
For transactions above Rs. 1 lakh and up to Rs. 2 lakh – Rs. 15 (plus GST applicable)
For transactions above Rs. 2 lakh – Rs. 25 (plus GST applicable)
Immediate Payment Service (IMPS)
IMPS is a real-time payment service that one can use throughout the day including holidays. This service is offered by National Payments Corporation of India (NPCI) that offers customers the option of transferring money instantly through banks and RBI-authorised Prepaid Payment Instrument (PPIs) issuers across the country.
PPIs are payment instruments that facilitate purchase of goods and services, including financial services, remittance facilities, against the value stored on such instruments.
Unbanked customers can also transfer funds through IMPS by using the services of PPIs, said NPCI on its website.
However, the charges for transfer through IMPS is decided by the individual member banks and PPIs.>