What are financial transactions?
Financial transactions deal with the event which involves money or payment. Such as the act of depositing money into a bank account, transferring money to other accounts. RTGS carry out financial transactions. Moreover, RTGS enables settlement of each transaction at the same time at the point of instruction. It is one of the fastest means of transferring funds through your account to beneficiaries account, both locally and outstation. To procure these features one must have a bank deposit account.
What is RTGS and what are its features?
Firstly, RTGS is a short form for Real Time Gross Settlement. It means the settlement of funds takes place in the books of RBI. The payments of which are final and irrevocable. The minimum amount is two lakhs and no upper limit prevails. Usually, the beneficiary branches are expected to receive the funds as soon as the transfer message is received. Moreover, the customer receives an SMS as a confirmation of the credit. Suppose the RTGS has been initiated to the beneficiary and there arises an issue with the account such as the account number is wrong/ Account doesn’t exist, then reversal of the amount to the original senders account takes place in one hour. There are more than 100000 RTGS enabled bank branches.
This service is available to customers from 9:00 a.m to 4:30 p.m on weekdays and 9:00 a.m to 2:00 p.m on Saturdays for settlement. The service charges are free for the receiver and for the sender the charges between two lakhs to five lakhs is thirty rs. per transaction and above five lakhs is not exceeding fifty-five Rs.
What is NEFT?
Firstly, NEFT means National Electronic Fund Transfer. It is an Indian system of electronic transfer of money from one bank or another bank branch. Banks supporting such transactions have to pass it using NEFT network. The details of the banks and the branches are provided on the RBI website. The transfer usually takes place on the same day. The settlement takes place in batches as per RBI guidelines. There is no upper limit for NEFT. Customers with internet banking can use the NEFT facility to transfer funds on their own. Moreover, the transfer of funds can also take place via bank branch. Allowed only to Nepal and no other country.
Generally, done in half hourly basis. The charges vary from bank to bank. The only standard is that inward transaction are free. Used to transfer funds from and to NRE and NRO accounts within the country subject to the provisions of FEMA and other guidelines. This system can also pay your credit card or loan EMI etc.
As the settlement takes place in batches it takes up to 2 hours. Moreover, in case of noncredit or delay in credit to the beneficiary account the NEFT facilitation center of the respective bank can be contacted. If the issue is not resolved satisfactorily the NEFT help desk at National Clearing Cell RBI( Mumbai) may be contacted. In case the credit does not affect the account then it must be reversed. It provides the Unique Transaction Reference (UTR) once the amount is debited.
What are the details one must furnish to effect the RTGS/NEFT transactions?
- Firstly, they take into consideration the value of the amount.
- Secondly, then they consider the remitting customer’s account number
- The name of the beneficiary bank and branch
- IFSC number of the receiving branch
- The name of the beneficiary customer.
- The account number of the beneficiary customer.
- Finally, establish the reason for the transfer (eg loan/ gift)
How to fill the RTGS/NEFT form?
- Firstly, the form has two parts: The acknowledgment slip and the main form.
- Secondly, the payee fills the form and keeps the acknowledgment slip. Fill in the following:
- Thirdly, the account holder’s bank branch and its location.
- The date of submission of the form and whether the payment mode is RTGS or NEFT.
- The remitted amount in numerical and in words.
- The name and the account details of the account holder.
- The name and the account details of the beneficiary.
- The cheque number if any.
- The contact details of both the parties.
- State the reason for the transaction.
- Finally, the authorized signature of the payee.
- Fill up similar details on the acknowledgment side.
In conclusion, submit the form at the counter and ensure the banker puts a stamp on acknowledgment.
For the simplification and understanding of the readers we have provided a distinction chart:
|Definition||transactions are settled immediately and on a gross level.||Transactions are processed and settled in lots, typically at the end of the day or at regular intervals|
|Transactions||large sums and high value||Usually any transaction|
|Liquidity||Participating banks pay the only net difference of debt and credit.||Each transaction may be settled individually.|
|The amount within India||Min: 200000|
|Charges||2 lakhs to 5 lakhs Rs. 30|
Above 5 lakhs Rs 55
|Up to 10k- Rs. 2.50|
10K to 1 Lakh- Rs 5
1 lakh- 2 lakhs- Rs. 10
Above 2 lakhs- Rs. 25