Wednesday, December 16, 2009


Real Time Gross Settlement and National Electronic Fund Transfer

As you must aware that finance plays a vital role to scale their economic growth in all the countries. If you take any kind of trade, currency is the essence of trade and it’s not possible to find out whether the trade is resulting with profit or loss.

In India, RBI (Reserve Bank of India) is issuing and controlling the flow of currencies and they route thru’ banking channels to distribute the currencies to public. As you must aware that RBI has started their work to introduce polymer currency with denomination of 10INR soon.

Also I used to see the clearing section (cheque processing section) in banks some couple of years back that they kept on checking account holders cheque to process an account holders instruction by transferring amount from one account to other account with in bank or with other banks in locally or nationally.

It takes minimum of two days to get funds cleared for local cheque and a week for outstation cheque with collection charges paid by account holders.

As a development, RBI had come up with normal transaction and high transaction, which says below 100000INR as low value transaction and above 100000INR as high value transaction and recently there was a change in process of high transaction from 100000INR to 2500000INR.

Finally, RBI had decided to eliminate the high value transaction thru’ cheques from January 1st, 2010 and RBI promotes online transfer, that is, NEFT (National Electronic Fund Transfer) which stands for 100000INR below and RTGS (Real Time Gross Settlement) which stands for 100000 and above INR transaction thru’ online transfer by using net banking.

RTGS takes to transfer funds immediately within the cut off time and NEFT takes a day within the cut off time.

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