When retired government employee S Rao sent a cheque for over Rs 2 lakh as stamp duty charges for his daughter who was buying a house, the bank officials first called him over phone to verify the cheque details. For, the amount involved was huge. Then, Rao was told to visit the bank branch personally to verify the signature. Subsequently, he was advised to send the money by RTGS or electronic mode as otherwise it would involve many formalities and thus consume time.
Though banks are actively promoting electronic transfer of funds and these modes are gaining traction, there are customers like Rao who still prefer the old modes of transferring money. Speed. That is the biggest advantage of electronic fund transfer -- real-time gross settlement or RTGS and national electronic fund transfer or NEFT. A cheque usually takes two to three days to clear; add another day if it is an outstation cheque. What's more, RTGS and NEFT are cheaper than issuing a cheque or DD, as the cost to the bank is less. In both RTGS and NEFT, the money is transferred directly from the bank account of the person sending or remitting the money to the bank account of the receiver.
RTGS: This is the fastest way of transferring funds. The transactions are settled on an instruction by instruction basis. Just that the minimum that can be so transferred is Rs 2 lakh.
NEFT: The transfer happens on a deferred net settlement basis. The transactions are settled in batches against the continuous individual settlement in RTGS. It operates in hourly batches from 9 am to 7 pm on weekdays, and 9 am to 1 pm on Saturdays. For instance, transactions put through between 9 am and 5 pm on weekdays are settled on the same day. For transactions settled after 6 pm on weekdays and after 1 pm on Saturday, the amount will be settled on the next working day. But it can be used for smaller amounts with no minimum threshold.Apart from the receiver's name, the details required include the receiver's bank, account number, and IFSC (Indian Financial System Code) of the destination bank branch for both RTGS and NEFT.
Internet banking: To access an online banking facility, you must register for the service. To access online banking, you will have to go through the bank's website, and enter the online banking facility using your user name and password. One can carry out transactions such as fund transfers, utility bill payments, shopping and so on through internet banking. As of now, banks do not charge any fees for this service.
Mobile banking: Banks promote this route these days. For transfer through SMS, the limit is Rs 5,000 per day. But for mobile applications-based transfer (interbank mobile payment service or IMPS), banks can now set their own limits depending on their risk. Earlier, RBI had set a limit of Rs 50,000 per customer per day through mobile banking.
Transfer of funds can be done by anyone who has an MMID (mobile money identifier), but one needs to be a registered net banking user. The biggest advantage is that mobile payments through the IMPS happen instantaneously.
| ||Private Bank |
|PSU Bank |
|Foreign Bank |
(Standard Chartered Bank)
|DD Issue||Rs 50 - 10,000 per DD||Rs 30 - 10,000 per DD||Rs 125 per DD for bulk order|
|NEFT (Outward|| || || |
|RTGS (Inward)|| || || |
|&There are no charges for NEFT Inward and RTGS Outward transfers; Mobile and net banking are free of costs |
Source: Banks' website
Apart from fund transfer, mobile banking can also be used for purchase of goods and services, making bill payments, investments in mutual funds or creating fixed deposits.
However, it is yet to catch up. It is used for less serious transactions such as bill payments. Internet banking also has not gained much traction, as it is mainly used by those in the metros.
So far, Union Bank of India is the only bank that has increased the limit on mobile transactions to Rs 2 lakh. Lalit Sinha, general manager (alternate channels and new initiative department) at Union Bank of India, says NEFT is most used today with 27 million users as on March 2012. "Also, NEFT and RTGS are now offered by all branches, including rural," he adds.