- The Reserve Bank of India(RBI) has announced that it is removing all charges on money transfers done through the RTGS and NEFT modes.This decision was taken to boost the digital funds movement.
- NEFT stands for National Electronic Fund Transfer.It is a payment system which facilitates one-to-one funds transfer from one financial institution to another.
- Using NEFT, individuals,firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the system.Under NEFT the settlement takes place in batches rather than individually.The batches are settled in hourly time slots.
- RTGS stands for Real Time Gross Settlement.As the name suggests,it enables money to move from one bank to another on a real time and gross basis.Since these fund settlements take place in the books of the Reserve Bank of India(RBI) these payments are final and irrevocable.
- The NEFT platform is primarily aimed for small value transactions.At one transaction the maximum value should be Rs 50,000.
- On the other hand,RTGS is aimed for large value transactions.The minimum amount to be remitted through RTGS is Rs 2 lakh.There is no upper ceiling for RTGS transactions.
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