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What is “NEFT” for Payments to India?

July 8, 2024July 15th, 2024No Comments
NEFT
Mariel Rhetta
Content Strategist at Rutland FX
Published on: (Updated ) - minute read

When sending money to or within India, you may have come across the term NEFT. In this article, we will explain what NEFT is, when it’s used, what the alternatives are, and more.

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What is NEFT?

NEFT stands for National Electronic Funds Transfer. It is a domestic payment rail within India that allows the transfer of funds from one bank account to another. Managed by the Reserve Bank of India (RBI), NEFT enables individuals, firms, and corporations to transfer money between banks across the country.

Although NEFT is primarily used for domestic payments within India, it can also facilitate international payments to India. This is possible when a payment service provider has a relationship with an Indian bank or a third-party provider that can complete the domestic leg of the transfer.

NEFT vs. IMPS: A Brief Comparison

When choosing a method for transferring funds within India, it’s helpful to understand the differences between NEFT (National Electronic Funds Transfer) and IMPS (Immediate Payment Service). Both are reliable systems but serve different needs and purposes.

Key Differences
  • Speed: IMPS offers real-time transfers, while NEFT processes transactions in batches, causing potential delays.
  • Availability: Both systems are available 24×7, but IMPS provides instant processing, whereas NEFT settles transactions in hourly intervals.
  • Transaction Limit: IMPS typically has a lower transaction limit compared to NEFT, which can handle larger sums without a specified upper limit by the RBI.
  • Use Case: NEFT is more suitable for larger, non-urgent transactions, while IMPS is perfect for urgent, smaller transactions.

Sending Money to India with Rutland FX

With Rutland FX, you can convert various currencies into Indian Rupees (INR) here’s what you need to know:

Supported Currencies

Rutland FX allows you to convert the following currencies into INR:

  • USD (United States Dollar)
  • GBP (British Pound Sterling)
  • EUR (Euro)
  • AUD (Australian Dollar)
  • CAD (Canadian Dollar)
Payment Rails

The payment route used depends on the amount being transferred:

  • For amounts under INR 500,000: IMPS (Immediate Payment Service) is used, ensuring instant transfers available 24×7.
  • For amounts above INR 500,000: NEFT is utilised, which operates only during business hours in India.
Weekend Conversions

Rutland FX supports weekend trading for this currency pair, allowing you to book conversions over the weekend. However, it is important to note that payments may not arrive as quickly as those sent during the week due to banking hours.

Transaction Limits

There is a maximum transaction size of INR 1,500,000 per beneficiary per day and the same limit per invoice per day. This ensures secure and manageable transfer volumes.

Same-Day Transfers

Rutland FX offers same-day transfers as long as the trade is settled by the 15:30 cut-off time.

Conversion of INR Back to GBP

INR can be converted back into GBP only in exceptional situations, such as if a payment fails due to incorrect bank details. This service is not commonly offered and is subject to specific conditions.

Holding INR in Your Multi-Currency Wallet

You cannot hold INR in your multi-currency wallet with Rutland FX. All trades booked into INR must have an outbound payment associated with them.

Payment Traces or Recalls

Rutland FX does not support traces or recalls via NEFT or IMPS network. Therefore, it is important to double-check the bank details before initiating a transfer to avoid any issues.

Still not sure?

If you are still unsure or have any further questions, please call us on 0203 026 0112 or request a callback to discuss your requirements.