While the National Electronic Fund Transfer (NEFT) system is the fastest way to send money, not to mention the fact that it is cheaper than traditional options like a demand draft, it has a few shortcomings. To ensure that your funds are transferred on time and without hindrances, you need to remember the following points:
NEFT need not be real time: Banks enjoy the discretion to decide on the cut-off time for transmitting settlement instructions, which need not coincide with RBI’s settlement timings. During the week, the latter settles NEFT in six batches between 9 a.m. and 5 p.m., while on Saturdays, only three batches are cleared between 9 a.m. and noon. However, most banks need you to send all weekday requests by 3.30 p.m., otherwise the funds are transferred on the next working day. On Saturdays, the bank cut-off time for same-day settlement is between 10 a.m. and 10.30 a.m. Note that no NEFT transactions are allowed on Sundays and national holidays. The actual time taken to credit funds also depends on the time taken by the beneficiary bank to process the payment.
Net banking does not make you automatically eligible for NEFT: Signing up for online banking is a pre-requisite, but all banks require you to register for the third-party fund transfer service as well before you can avail of NEFT services. You have to keep your online banking account active or your bank may arbitrarily withdraw this facility, and the first time you’d learn of it would be when you are unable to transfer money.
Registering a beneficiary takes time: While banks like SBI and ICICI allow you to register a beneficiary within minutes, some like the HDFC Bank and ABN Amro require 24 hours to add a name to your account. So, you can’t transfer funds immediately. In some cases it can take up to two working days to authorise a third-party beneficiary. Some leading private banks even make a validation call to your listed landline number before authorising a beneficiary. Though this is an attempt to eliminate identity theft and fraud, it complicates matters for customers.
You need to have the IFSC code: Though most bank Websites offer a drop menu listing various branches of the bank and the location you want for the beneficiary account, this list is not exhaustive. Also, the NEFT net is yet to encompass every single bank branch in the country. Hence, all too often, you won’t be able to find the branch you are seeking. To be on the safe side, get the IFSC code from the beneficiary before initiating the NEFT transaction. This 11-digit alphanumeric code is now printed on each leaf of a chequebook—typically above the cheque number or at the bottom of the leaf—but chequebooks issued in 2007 or earlier may not list this code. If the beneficiary does not know the IFSC code, you can get it at http://rbidocs.rbi.org.in/rdocs/content/docs/68774.xls.
It’s no longer a free service: With RBI removing the waiver on processing charges, many banks are now levying customers for NEFT. However, as per RBI guidelines, these charges should not exceed Rs 5 per transaction for amounts up to Rs 1 lakh.
Don’t forget the UTR number: Unless you key in a wrong account number, NEFT transactions are almost error-free. But note down the 16-digit Unique Transaction Reference number generated by your branch after a transaction. This is instrumental for future reference in case you want to track the transaction or face complications after a failed process.
