NEFT: Secure and Convenient Digital Fund Transfers in India

NEFT, which stands for National Electronic Fund Transfer. It is a method of online fund transfer between banks and branches within India. Currently, MCA21 payments can be made using Credit Card, Internet Banking, and Physical Challan. The Ministry has authorized five banks to collect MCA21 fees. These are – 

This means that only account holders of these banks can avail of the Internet banking facility. Additionally, payment via challan can only be made at the authorized branches of these five banks. While this was a significant improvement compared to the previous manual system, it resulted in delays in the incorporation of companies and processing of other eForms. To address the inconveniences caused by payment processing delays, the Ministry is introducing the option to pay MCA fees through NEFT (National Electronic Fund Transfer) mode, in addition to the existing payment methods.

Fund Transfers with NEFT 

NEFT enables the transfer of funds by utilizing the NEFT service provided by the Reserve Bank of India (RBI). This service facilitates crediting funds to the recipient’s account in another participating bank. The RBI acts as the service provider and transfers the funds to the designated account in the recipient bank. NEFT operates on a deferred net settlement (DNS) basis, meaning transactions are settled in batches at specific intervals. In DNS, transactions are settled only at predetermined points in time.

NEFT has a lot of features making the fund transfer process effortless. These are:-

• It is built on a secure platform.
• It does not require using a cheque or a Demand Draft (DD) for money transfer.

• It is paperless. 
• It allows you to transfer funds as per your convenience.
• The SMS messages and email confirmations can be used to verify a payment.
• You can be used it to pay your credit card bills.
• The parties are not required to be present in person.
• In this, both parties benefit from real-time transfers.
• You can start an internet banking session, from anywhere.
• It avoids delays.
• It does not require the user to visit the bank.

Benefits of NEFT (National Electronic Fund Transfer)

NEFT provides individuals with a convenient, secure, and widely accepted method for transferring funds digitally, making it a preferred choice for many individuals and businesses in India. You might wonder who is Eligible to Transfer Money Via NEFT from One Bank to Another. Any individual, corp/firm with a current or savings account is eligible to transfer money through NEFT.

NEFT  is used to transfer funds from one account to another within the same bank, as well as between other banks’ accounts.  However, to complete a transaction successfully, the user should enter the required details correctly. Any errors in the information might cause a transaction to fail. NEFT transactions done online are free with effect from 1st Nov 2017.

Let us look at some advantages:-

• Economical to use NEFT for money transfers.
• Nominal Charges
• Convenience 
• Wide Acceptance 
• Security
• Timely Settlement 
• No Lower Limit 
• Cost-Effective

What are the Ways to Transfer Funds via NEFT?

When you are making a payment on the MCA21 portal, you have to choose the NEFT option for  payment. An SRN will be created, and an electronic challan will also appear. Following this, you have to follow the following steps:-

1. You will send your funds to either of the MCA21 accounts via a digital banking facility. You have the option to put SRN. It is present in the remarks column.
2. Your bank will give a UTN (unique transaction number)  for the transfer process.
3. The bank will inform MCA21 about the payment generation.
4.  It will also provide the UTN.
5. Now, you have to login to MCA21. 
6. After this, you have to  link UTN and SRN. 
7. Now you are supposed to click on the link. The link says Link NEFT Payment. This option is available under the services tab.
8. It is important to remember that  the payment details will be transferred from the designated banks only. It gets updated in MCA21. 
9. The process takes about 6 to 24 hours. 
10. The time period is measured from the initiation of payment. Therefore, after the required  time period, you must link the SRN.
11. You have to provide the SRN and UTN numbers.
12. For verification purposes, you have to provide an account number.
13. It is the one from which the transfer was carried out. You also have to mention the amount transacted. 
14. If the remittance has been notified to the MCA21 system, and the details match, then the linking will be successful. 
15. After this, the status of the SRN will be changed to PAID. Furthermore, the MCA21 will create work items for further processing.
16. In case, the details of payment (for the SRN), is still not received from banks, you will receive an information message. 
17. You can then link SRN & UTN at a later time.
18. You will get an error message notification if the details don’t match. 

This linking will be allowed only within:-

• Two days of the initiation of remittance by the bank. Remember, no linking will be allowed after this. Due to this delay, the service request will not be considered.

Note:– If the linking is not completed within the said two days time period, it will be reversed by the concerned bank. E.g. In case the UTN provided by the bank on 20th June, 2023 is not linked by the user by 22th June, 2023 (bank closing time) , then it  will be marked as “reversal” and it will be reported to the bank on the  23rd of June, 2023.

What are the Transaction Charges for NEFT?

The transaction charges for NEFT from Bank Branches are mentioned below:-

List of NEFT Holidays

RBI declares holidays for the successive year at the end of the current year.  In addition to this, no settlements are made on Sundays. The 2nd and 4th Saturdays of the month are also days when no settlements are made. The festivals like Diwali, Holi etc. are also bank holidays, although their dates change every year. Therefore, it is advised to check these dates on the website of RBI.  Let us look at the fixed bank holidays mentioned by the RBI. 

Any transaction made on the above mentioned holidays will be debited from the payee’s account on the same day. Although, it is credited to the account of the beneficiary on the next working day. Furthermore, there are daily time periods that vary from bank to bank.

Note:- These timings differ on weekdays and weekends. The user can get the latest cut off timings from his/her bank by visiting the branch. 

NEFT Inward

The NEFT inward process is defined as a payment technique that is available on the RBI website. It facilitates one-to-one fund transfers. Using the NEFT functionality, an individual can virtually send money from his/her local bank to another individual. Additionally, companies or corporations with accounts in any local banking system in our country can get the NEFT payment. If you do not have a bank account, you can still utilize this NEFT alternative to place the funds. However, it is important to understand that cash transfers are limited. The limit is up to a maximum of Rs. 50,000 per transaction.

In this technology, money transfer arrangements are settled at regular intervals of every ½ hour. It’s worth noting that there are 23  settlement groups (30 minutes each) during business days from 8:00 am to 7:00 pm, except for the second Saturday and fourth Saturday of each month. The receiver should expect to receive the funds from the NEFT transaction within 2 office hours.

Details Required for NEFT Bank Transfer 

You need to have certain details with yourself for NEFT Funds Transfer. These are:-

• Name of the beneficiary
• Account number of the beneficiary 
• Sender to receiver information
• IFSC code of the destination bank branch
• The amount to be remitted
• His or her Bank (the recipient’s)  account branch

Points to Remember Before NEFT Transfer 

In the 21st century, with the advancement in technology we have seen newer online banking options. Although, you need to safeguard yourself from many banking frauds. Hence, to become a smart citizen, and use NEFT for smooth NEFT transfer, you need to remember the below mentioned points:-

• NEFT Transfer applies to all retail savings, that is  – Salary, NR, Managed, Non-managed, as well as individual customers.

• The bank informs the  MCA21 system in about four to five working hours about the successful NEFT payment receipt.

• NEFT transaction charges are available on the official website of  RBI. These charges are in addition to the MCA21 filing fee.

• UTN is a unique reference number provided by the user’s bank account. This unique number is used for each NEFT transaction.

• To verify whether the funds have been successfully transferred to MCA, you can track the status through your bank branch.

• Once the transaction is successfully linked to the SRN on the MCA21 portal, the payment status can be tracked using the ‘Track payment status’ link.

• If the payment is not successful, and you need the debited amount to be returned to your account, you should contact your bank’s branch immediately. This will be done wherever the funds have been transferred using the NEFT process.
• There isn’t any such limit (minimum/ maximum) on the amount of funds that could be transferred using NEFT, through the current account. Although, for personal accounts there might be certain limits.

• The NEFT option is available for all payments concerned with the MCA21 Services.

• The challan’s validity for payments conducted via  NEFT is based on the date of event. It is also related to the date the electronic challan is generated. This same thing is mentioned on the electronic challan that is generated.

• The number of transactions does not have any limit levied by the bank that can be made per day. Although, they may impose a limit. Your bank establishes these limits on the transactions. You are advised to contact your respective bank to know the details.

• The list of bank branches under NEFT Mode are mentioned on the official website of the Reserve Bank of India.

You May Also Like

Frequently Asked Questions (FAQ’s):-