In the realm of modern banking and finance, the full form of “NEFT” stands for “National Electronic Funds Transfer.” NEFT is a widely-used electronic payment system that enables seamless and secure interbank transactions across India. In this comprehensive guide, we will delve into the details of NEFT, its functioning, and its significance in the digital economy.

What is NEFT?

National Electronic Funds Transfer (NEFT) is an electronic payment system that facilitates the transfer of funds from one bank account to another within India. It operates on a deferred settlement basis, meaning that transactions are processed in batches at set intervals rather than in real-time.

How NEFT Works

The NEFT process involves the following steps:

A sender (remitter) initiates an NEFT transaction by submitting a request to their bank. They provide details such as the recipient’s account number, bank branch, and the amount to be transferred.

Entry by the Bank:
The sender’s bank records the transaction request and sends it to the NEFT system. The transaction is assigned a Unique Transaction Reference (UTR) number.

Batch Processing:
NEFT transactions are processed in batches at fixed intervals throughout the day. There are multiple settlement cycles on weekdays and fewer cycles on Saturdays.

The NEFT system routes the transaction to the recipient’s bank based on the bank branch’s Indian Financial System Code (IFSC). The IFSC uniquely identifies each bank branch in India.

Credit to Recipient:
Upon receipt of the NEFT request, the recipient’s bank credits the amount to the beneficiary’s account. The beneficiary is typically the person or entity receiving the funds.

Both the sender and the recipient receive confirmation of the transaction. The confirmation includes details such as the UTR number, transaction amount, and the time of transfer.

NEFT Timings

NEFT transactions can be initiated during the following hours:

  • On weekdays (Monday to Friday): 8:00 AM to 7:00 PM (subject to the specific timings of the individual bank branches).
  • On Saturdays: 8:00 AM to 1:00 PM (subject to the specific timings of the individual bank branches).

यह भी पढ़ें: सर्वश्रेष्ठ ऑनलाइन आईईएलटीएस कोचिंग एवं प्रशिक्षण अकादमी

Significance of NEFT

NEFT is significant for several reasons:

It provides a convenient and secure means of transferring funds electronically, reducing the reliance on physical checks and cash.

NEFT can be used by individuals and businesses across India, promoting financial inclusion.

प्रभावी लागत:
NEFT transactions are cost-effective compared to other forms of fund transfer.

Digital Transformation:
NEFT is a part of India’s digital financial ecosystem, aligning with the government’s efforts to promote digital payments.

Both senders and recipients can track the status of their NEFT transactions using the UTR number.

Settlement Assurance:
NEFT transactions are settled within defined cycles, providing assurance to both parties.


National Electronic Funds Transfer (NEFT) is a cornerstone of India’s digital banking infrastructure, allowing individuals and businesses to conduct secure and convenient electronic transactions. Its efficiency, accessibility, and cost-effectiveness make it an indispensable tool in the modern financial landscape, contributing to India’s digital transformation and financial inclusion.

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