The two primary networks for settling electronic payments in India are the National Electronic Funds Transfer System (NEFT) and the Real Time Gross Settlement System (RTGS). Everyone should know exactly what an RTGS code is and how it differs from an IFSC code. Anyone using the internet to conduct financial transactions should know this distinction. It is essential, however, that people must be familiar with NEFT, IFSC, and RTGS before they can grasp this distinction.
This article will examine RTGS and NEFT transactions and determine whether the RTGS and IFSC codes are identical.
What is NEFT?
The National Electronic Funds Transfer (NEFT) system is a countrywide network that enables financial transactions between customers of different bank branches throughout the country.
Here, it is vital to remember that the Indian Financial System Code (IFSC) is required for completing RTGS and NEFT-based transactions. The Reserve Bank of India’s website is a good place to start looking for an IFSC code, uniquely identifying a branch of a certain bank. Therefore, realising that there is no RTGS code is essential.
All three of these electronic transfer systems rely on the IFSC Code.
What is RTGS?
The Reserve Bank of India is responsible for the RTGS payment system in India. RTGS refers to a mechanism for transferring money between financial institutions that is both real-time and based on a gross settlement. Regarding moving money across bank accounts, RTGS is the quickest option.
What we mean by “settlement in real time” is that there is no lag time associated with the monetary exchange. Payments are processed and paid in a matter of seconds. To settle on a gross basis means that the transactions are resolved independently of one another, one by one. Money transfers recorded by The Reserve Bank of India are considered final and cannot be revoked.
How is RTGS different from NEFT?
When settling transactions, NEFT uses a batch process and operates on a Deferred Net Settlement basis, also known as DNS. All transactions up to the settlement cutoff time are considered when settling at DNS. Each monetary exchange is properly recorded as a receivable or payment in NEFT. However, RTGS allows for the separate settlement of each of these transactions. During the week, the NEFT processes twelve settlements between 8 a.m. and 7 p.m., while on Saturdays, the system processes six settlements between 8 a.m. and 1 p.m. If a transaction is started after the settlement time, it will be settled the following settlement time. However, RTGS transactions are completed instantly within the RTGS’s operating hours. Thus, this is not the case.
Is IFSC and NEFT code same?
NEFT code is the alternative term for IFSC since it is also employed for NEFT payment systems. Users must be aware of this information. This is a unique identifier that is crucial for conducting financial transactions. This code is displayed on a chequebook and may be readily located online by browsing the bank branch’s code.
Therefore, there is no need for confusion between NEFT and IFSC since both are identical. The first four digits of this alphanumeric code represent the bank code; the fifth digit is a “0” and serves as a control character; the last six digits identify a particular branch of the bank.
FAQs
What is the IFSC code for NEFT?
The Indian Financial System Identifier is a special 11-digit alphanumeric code for each individual bank in India that provides electronic funds transfers. This code is the bank's identifier on the NEFT (National Electronics Funds Transfer) system.
Can NEFT be completed without the IFSC code?
Recognising bank accounts and making interbank transfers without an IFSC code is impossible. However, transferring funds inside the same bank without an IFSC number is still feasible.
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