RBI has widened the scope of the National Electronics Funds Transfer (NEFT) for small-ticket online settlements by extending the transaction timings and facilitating speedier settlements.
In a notification posted on its website on Friday, RBI has said customers will now be able to use this facility for extended hours besides increasing the frequency of batches of settlements.
From March, customers will be able to conclude transactions from 9 am to 7 pm from the earlier deadline of 5 pm on week days. While on Saturday, the deadline will be extended by an hour from 12 pm to 1 pm. RBI has also decided to move to an hourly frequency of settlement of batches, and accordingly increased the number of batches of settlements from six to 11 on week days and from three to five on Saturday.
According to RIS Siddhu, general manager of PNB, the move will encourage more remittances through this system and we may see more cheques and drafts settling through this platform. The NEFT platform is offered by RBI essentially for retail customers to make online remittances of up to Rs 1 lakh per transaction.
While the settlement here at present is on a T+1 basis (that is the next day of the transaction.) RBI will now move to B+1 settlement system or an hourly settlement, which means the transaction will be settled in the next batch where each batch will have one hour duration.
What makes NEFT different from RTGS is that the former is more high value real time transactions while NEFT settlements are not instantaneous.
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