NEFT is an nationwide electronic payment system to transfer funds from one account to another, between NEFT participant bank branches in India. The NEFT system operates on a deferred net settlement basis(DNS), in which transactions are settled in batches. It is a risk free, secure and reliable mode for transfer of funds of any amount, in which more than 75,000 branches of 100 Banks participate.


  • NEFT is 100% electronic. Thus, it is more speedy and error-free than the slow, paper-based Demand Draft system.
  • NEFT also scores over Demand Draft (DD), Mail Transfer (MT), Telegraphic Transfer (TT) between account holders of the same bank. Telegraphic Transfer between account holders of different banks involves extensive paperwork.
  • NEFT is an inter-bank, intra-bank and inter-city, intra-city system. Even account holders of different banks can transfer funds without elaborate paperwork and procedures.

How the System Works:

  • Step-1 : An individual / firm / corporate intending to originate or transfer funds through NEFT has to fill an application form giving details of the beneficiary like (name of the beneficiary, name of the bank branch where the beneficiary has an account, IFSC of the beneficiary bank branch, account type and account number). The application form will be available at the originating bank branch. The originator authorises the branch to debit his account and remit the specified amount to the beneficiary. Customers enjoying net banking facility offered by their bankers can initiate the funds transfer request online. Some banks offer the NEFT facility even through the ATMs. Walk-in customers will, however, have to give their contact details (complete address and telephone no. etc.,) to the branch. This will help the branch to refund the money to the customer in case credit could not be afforded to the beneficiary‚Äôs bank account or the transaction is rejected / returned for any reason.
  • Step-2 : The originating bank branch prepares a message and sends the message to its NEFT Service Centre.
  • Step-3 : The service centre forwards the message to the NEFT Clearing Centre operated by National Clearing Cell, Reserve Bank of India, Mumbai to be included for the next available batch.
  • Step-4 : The Clearing Centre sorts the funds transfer transactions destination bank-wise and prepares accounting entries to receive funds from (debit) the originating banks and give the funds to (credit) the destination banks. Thereafter, bank-wise remittance messages are forwarded to the destination banks through their NEFT Service Centre.
  • Step-5 : The destination banks receive the remittance messages received from the Clearing Centre and pass on the credit to the beneficiary accounts.


Fast - Funds are transferred on the same day. Delays and paperwork are avoided

Safe - Frauds in processing paper instruments are avoided

Secure - Facilitates funds transfer from account to account with built-in security measures.Control practices, computerization of control records and detailed procedural guidelines make the system absolutely secure

Hassle-free - Beneficiary need not go to the bank. Amount is credited to his bank account directly.

Timings - 9.00 am to 6.00pm