What is the Need for NEFT Transactions?
Generally, before the transactions were made online if a person wants to send money to another person, then he has to go to the bank where he has the account and there he has to transfer the money. But with the help of NEFT, they can be performed at any time at any place without being physically at the Bank which made the transaction process much easier and safe. Through NEFT transactions, money can be transferred at any time of the day which is very convenient.
NEFT transactions were introduced by RBI in November 2005. Before the NEFT was launched, Interbank Mobile Payment Service(IMPS) and Real Time Gross Settlement(RTGS) were the only two electronic modes of payment transfer in India. But a charge has to be paid by the people for every transaction done and the transactions too were only of high payments. So, to enable transactions with small amounts of money, NEFT was introduced which is very beneficial for retail customers. Initially, NEFT started with 5000 branches in nine cities in India. But now due to its good response and efficiency and convenient transactions, NEFT was now extended to 150000 Bank branches in India.
Changes Made After Getting Launched in the Indian Market
- Before 2010, the maximum limit per transaction using NEFT used to be 100000 but in 2010, it was made to 200000.
- In 2016, RBI enabled NEFT transactions to be done 24/7 and even on holidays too which provides accessibility and convenience.
NEFT Full Form
NEFT stands for National Electronic Funds Transfer. We often hear the word NEFT in the financial world but many have doubts about what is NEFT and how it works. NEFT is a country-wide electronic fund transfer system for sending money from one bank account to another account in a safe and hassle-free manner. NEFT allows the electronic transfer of funds or money from one bank account to another bank account. NEFT transactions are processed online. Reserve Bank of India and its customers are involved in NEFT transactions. All Indian Banks can participate in NEFT transactions.