Full Form

NEFT Full Form | What is the Full Form of NEFT?

NEFT - National Electronic Fund Transfer

NEFT is an abbreviation for National Electronic Fund Transfer. It is a payment system in India that allows for online fund transfers from one bank account to another.

NEFT Full Form | National Electronic Fund Transfer

Key NEFT Features

  • Transfers of funds can be initiated by individuals, firms, and corporates, electronically from any bank branch to any individual, firm, or corporate having an account with any bank branch in the country participating in the scheme.
  • Even individuals who do not have a bank account can deposit cash (up to Rs 50000/-per transaction) at the NEFT-enabled branches with instructions to transfer funds using NEFT.
  • The NEFT system also facilitates a one-way cross-border transfer of funds from India to Nepal, known as the INDO-NEPAL Remittances Facility Scheme. Funds can be transferred by a remitter from any of the NEFT-enabled branches in India to Nepal, irrespective of whether the beneficiary in Nepal maintains an account with a bank branch in Nepal or not. The beneficiary would receive funds in Nepalese rupees.

This article on the full form of NEFT intends to highlight the usage of the fund transfer system, NEFT and it can be used for online payments.

Pre-requisites for starting an NEFT transaction-

  • A source bank (a bank that initiates the transfer of funds) and a destination bank (which receives the transferred funds) branches should be part of the NEFT network.
  • The remitter (who sends payment) should provide the bank with the beneficiary’s (who receives payment) details such as beneficiary name, account number and type, name, and IFSC of the beneficiary bank branch.

*IFSC stands for Indian Financial System Code, an 11-digit alpha-numeric code that uniquely identifies the branch of the bank participating in the NEFT system.

Under the NEFT System, the settlement of fund transfer requests is done on a half-hourly basis. Twenty-three half-hourly settlement batches run from 8 am to 7 pm on all working days of the week except the 2nd and 4th Saturday of the month. Any transaction raised beyond the cut-off time or on holidays is executed on the next working day.

Operation of the NEFT system

  • An individual, firm, or corporate intending to initiate a transfer of funds through NEFT is required to fill out an application form, available at any NEFT-enabled originating bank branch, providing details of the beneficiary (such as the name of the beneficiary, the name of the bank branch where the beneficiary has an account, the IFSC of the beneficiary bank branch, account type, and account number) and the amount to be remitted. Customers having a net banking facility can initiate the fund transfer request online.

The bank owns the authority to debit the remitter’s account and transfer the specified amount.

  • The source bank prepares a message and sends it to the NEFT Service Centre.
  • The message is forwarded to the NEFT Clearing Centre by the pooling centre (operated by the National Clearing Cell, Reserve Bank of India, Mumbai) to be included in the next available batch.
  • The fund transfer transactions’ destination is sorted by the Clearing Centre according to destination and accounting entries are prepared to receive the funds from the originating banks (debit) and give the funds to the destination bank (credit).

Then, bank-wise remittance messages are forwarded to the destination banks via their NEFT Service Centre.

  • The inward remittance messages are received by the destination banks from the Clearing Centre and pass on the credit to the account of the beneficiary.

Service Charges for NEFT transactions:

  • Charges are levied on the remitter for an outward transaction by the source bank branches.
  • Not exceeding 2.50 (+ Applicable GST)-For transactions up to 10000
  • Not exceeding 5 (+ Applicable GST)-For transactions above 10000 up to 100000
  • Not exceeding 15 (+ Applicable GST)-For transactions above 100000 up to 200000
  • Not exceeding 25 (+ applicable GST)-For transactions above 200000
  • No inward transaction charges are levied on the destination bank branches.

Recently, the RBI announced that the charges on online money transfers via NEFT would be waived off, to boost digital transactions in the country.

Benefits of NEFT

  • The remitter does not need to send the physical cheque or demand draught to the beneficiary.
  • The beneficiary need not worry about the theft of a physical instrument.
  • NEFT is cost-effective.
  • Credit and debit confirmations of the transactions are sent by SMS or email.
  • Funds can be transferred from home/workplace via internet banking.
  • By contacting the NEFT Customer Facilitation Centre, available on the websites of respective banks, services are available to deal with the delay in credit or non-credit.


NEFT offers great advantages, as we can send money to our friends, family, or for online shopping from the comfort of our home or anywhere we are without having the need to physically visit the branch. We can use any laptop, tabs, mobile phones, etc with the internet to initiate NEFT transactions.

Though there are reasonable advantages to the system, one may face serious problems if the details of internet banking (user id and password) are not kept securely by the remitter. Also, the details mentioned about the beneficiary must be accurate for a hassle-free transaction.

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