NEFT, RTGS, ECS CREDIT, ECS DEBIT - 15 Mints Seminar Notes

NEFT, RTGS, ECS CREDIT, ECS DEBIT - 15 Mints Seminar Notes

 

National Electronic Funds Transfer (NEFT)

• National Electronic Funds Transfer (NEFT) is a mode of online funds transfer that is introduced by the Reserve Bank of India (RBI). 
• It quickly transfers money between banks throughout India. A bank branch must be NEFT-enabled for a customer to be able to transfer the funds to another party.
  
• In December 2019, the Reserve Bank of India (RBI) has introduced the all-new NEFT payment system that is active and up 24×7 and 365 days a year. 
• The objective behind this new clearance system is to promote digital transactions and the global integration of Indian financial markets.
  
• You can place an NEFT request at any point in time. 
• The NEFT request will be sent to a queue. All the NEFT requests in the queue will be cleared once every hour.
• Real-time gross settlements are a process that is used for high-value inter-bank transactions. These transactions typically need instant and full clearing and are generally done by the central bank of the country.

 

RTGS

• RTGS reduces the overall risk as these settlements are made almost instantly throughout the day. 
• It is not like National Electronic Funds Transfer (NEFT) in which settlements are made in batches. Hence, the charges involved in the real-time gross transfer of funds may incur higher costs to customers.
  
• All that a customer needs to furnish to transfer funds through real-time gross settlement is the duly filled form which contains the information of the account from which the funds have to be debited from, the account to which the funds have to be credited, and message (if any).

 

ECS credit

• ECS credit is used for allowing credit to a large number of beneficiaries by raising a single debit to the customer’s account, such as dividend, interest or salary payment.
• The end beneficiary need not make frequent visit to his bank for depositing the physical paper instruments.
• Delay in the realisation of proceeds, which used to happen in the receipt of the paper instrument, is eliminated.
• The ECS user helps to save on administrative machinery for printing, dispatch and reconciliation.

 

ECS debit

• ECS debit is used for raising debits to a number of accounts of consumers or account holders for affording a single credit to a particular institution, in cases such as utility payments like electricity bills and telephone bills.

Trouble-free: 

• Eliminates the need to go to the collection centres or banks and the need to stand in long queues for payment.
  

Easy to track: 

• Customers are not required to track down payments by last dates. The ECS users would monitor the debts. 
• The ECS user saves on administrative machinery for collecting the cheques by monitoring their realisation and reconciliation.
  

Presented by

Arvind R

CAT Student

MAGME MEDAL, Hosur