These days for transferring money in huge amounts in few hours is possible and RBI's two schemes are responsible for it.
These Schemes are:
RTGS and NEFT
Real Time Gross Settlement allow individuals, companies and firms to transfer funds from one account to another over the internet. RTGS does not require core banking to be implemented across participating banks, since transactions are direct.
Below is a listing of countries and their RTGS systems with a different name :-
National Electronic Funds Transfer is a nation-wide system that facilitates individuals, firms and corporates to electronically transfer funds from any bank account to another. For being part of the NEFT funds transfer network, a bank branch has to be NEFT-enabled.
Q3. How does it differs from RTGS
Unlike RTGS where settlement is on real time basis, NEFT operates on a Deferred Net Settlement (DNS), ie. transactions are settled in hourly batches. For example - There are 25 settlements from 9 am to 7 pm on week days, So any transaction initiated after a designated settlement time would have to wait till the next designated settlement time.
These Schemes are:
RTGS and NEFT
Q1.What is the Full Form of RTGS ?
Ans.RTGS - Real Time Gross Settlement
Real Time Gross Settlement allow individuals, companies and firms to transfer funds from one account to another over the internet. RTGS does not require core banking to be implemented across participating banks, since transactions are direct.
Below is a listing of countries and their RTGS systems with a different name :-
- United Kingdom - CHAPS (Clearing House Automated Payment System)
- Japan - BOJ-NET (Bank of Japan Financial Network System)
- Hong Kong - Clearing House Automated Transfer System (CHATS)
- Australia - RITS (Reserve Bank Information and Transfer System)
- United States - Fedwire
RTGS is the fastest possible money transfer system since the money is transferred on a real time and gross basis. Real time means the transactions are settled as soon as they are processed. Gross settlement means the transaction is settled on one to one basis.
Q2. What is the Full Form of NEFT ?
NEFT - National Electronic Funds Transfer
National Electronic Funds Transfer is a nation-wide system that facilitates individuals, firms and corporates to electronically transfer funds from any bank account to another. For being part of the NEFT funds transfer network, a bank branch has to be NEFT-enabled.
A Customer must possess the following information before using NEFT :-
- IFSC (Indian Financial System Code) of the beneficiary Bank/Branch
- Full account number of the beneficiary
- Name of the beneficiary
Q3. How does it differs from RTGS
Unlike RTGS where settlement is on real time basis, NEFT operates on a Deferred Net Settlement (DNS), ie. transactions are settled in hourly batches. For example - There are 25 settlements from 9 am to 7 pm on week days, So any transaction initiated after a designated settlement time would have to wait till the next designated settlement time.
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