NEFT
National Electronic Funds Transfer (NEFT) is an RBI-operated electronic payment system that transfers funds between bank accounts in half-hourly batches, available 24×7 since December 2019.
Understanding NEFT
NEFT was originally launched in 2005 with limited operating hours; since 2019 RBI has run it as a 24×7 system. Each batch settles via the bank's RBI account in real time. Once a batch closes, funds move to the beneficiary bank typically within 30 minutes — though same-batch settlement can be near-instant.
NEFT supports payments up to any amount (subject to bank limits) and is the standard rail for salary credits, vendor payments, EMI auto-debit, and government disbursements. Unlike UPI, it uses the beneficiary's account number and IFSC rather than a VPA.
Why it matters
NEFT is the workhorse for high-value, non-time-critical transfers. For instant transfers, UPI (up to ₹1 lakh) or IMPS (up to ₹5 lakh) is faster. For very high values (₹2 lakh+) where you want guaranteed real-time settlement, RTGS is the right choice. Understanding which rail to use saves both time and fees.
Example
You initiate a ₹2 lakh NEFT transfer at 11:42 AM. It enters the 12:00 PM batch, settles at NPCI/RBI level by 12:30 PM, and credits the beneficiary's bank by 1:00 PM. The reference number (UTR) appears on your statement immediately, but actual credit timing depends on the receiving bank's processing.
You initiate a ₹2 lakh NEFT transfer at 11:42 AM. It enters the 12:00 PM batch, settles at NPCI/RBI level by 12:30 PM, and credits the beneficiary's bank by 1:00 PM. The reference number (UTR) appears on your statement immediately, but actual credit timing depends on the receiving bank's processing.