Topics Covered:
Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights.
National Electronic Funds Transfer (NEFT)
What to study?
For Prelims: What is NEFT and RTGS? Significance.
Context: RBI has extended the availability of National Electronic Funds Transfer (NEFT) round-the-clock on all the seven days of the week — 24×7 basis — to facilitate beyond the banking hour fund transfer.
Significance:
The RBI joins an elite club of countries having payment systems which enable round the clock funds transfer and settlement of any value.
So far, Australia, Hong Kong, Mexico, Sweden, Turkey, the UK, South Korea, Singapore, South Africa, and China have such payment system.
What is NEFT?
NEFT is an electronic funds transfer system maintained by the Reserve Bank of India (RBI).
Started in November 2005, the setup was established and maintained by Institute for Development and Research in Banking Technology (IDRBT).
NEFT enables bank customers in India to transfer funds between any two NEFT-enabled bank accounts on a one-to-one basis.
It is done via electronic messages.
Unlike Real-time gross settlement (RTGS), fund transfers through the NEFT system do not occur in real-time basis.
What is RTGS?
- RTGS are specialist funds transfer systems where the transfer of money or securities takes place from one bank to any other bank on a “real time” and on a “gross” basis.
- Settlement in “real time” means a payment transaction is not subjected to any waiting period, with transactions being settled as soon as they are processed.
Sources: the Hindu.
