Make best of deft NEFT

This article was originally published in Postnoon on October 26th, 2012, Co-Author: Anuj Hetamsaria

A few days back, I had counseled Mr. Mukherjee about mobile banking, in the context of transferring funds from one account to the other. Today he came to me with further questions with regards to funds transfer.

Mukherjee: Professor, the relationship manager at the bank told me that funds could be transferred via NEFT. What is this NEFT?

Nicky: NEFT stands for National Electronic Funds Transfer and it facilitates the transfer of funds across different branches of the same bank or different banks. It is easy, cheap, safe and fast.

Mukherjee: I am sure it comes with its own set of requirements!

Nicky (smiling at the cynicism): Oh yeah! You will need to provide to your bank, the Account Number and name of the beneficiary, the name, address and IFSC (Indian Financial System Code) of the beneficiary’s branch.

Mukherjee: Where do I get all these details from?

Nicky: The person to whom you want to transfer the money to, that is, the beneficiary, should be able to help you with this. All these details will be found on the cheque book of the beneficiary. IFSC code can also be found out on RBI website and from the bank branch. Care must be taken to ensure that these details are provided to your bank correctly, to avoid transaction errors.

Mukherjee: What is this IFSC? I have never heard of it before?

Nicky: According to, IFSC is an alphanumeric code that uniquely identifies a bank branch for participating in NEFT system. It is an 11-character code with the first 4 alphabetic characters representing the bank and the last 6 characters (usually numeric, but can be alphabetic) representing the branch. The 5th character is 0 (zero). IFSC is used by the NEFT system to route the messages to the destination banks / branches.

Mukherjee: So I can transfer funds using NEFT at any time of the day or night and any day of the week?

Nicky: Not really. You cannot transfer funds on bank holidays, like public holidays and Sundays. From Monday to Friday, the facility is available between 9 AM and 7 PM and on Saturdays, between 9 AM and 1 PM. There are eleven hourly settlements between 9 AM and 7 PM on all weekdays and five hourly settlements between 9 AM and 1 PM on Saturdays. The money will be credited to the beneficiary’s account on the same day or at the most next day in case the message is sent during the last batch of settlement. If the amount is not credited within the specified time then the same must be reported to the banking authorities and proper follow up of the same to be done.

Mukherjee: You did tell me that it is cheap. But can you offer some specifics on charges?

Nicky: Well…My bank changes Rs5/- per transaction if the amount is less that Rs 1 lakh and Rs 25/- if the transaction amount is more than Rs. 1 lakh.

Mukherjee: Hmmm, that’s really not much. Thank you Prof.

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