Difference between NEFT and RTGS

NEFT vs RTGS

NEFT stands for National Electronic Funds Transfer. RTGS stands for Real Time Gross Settlement. The banking regulator Reserve Bank of India(RBI) has instructs the banks that they should not use the instant funds transfer system, RTGS for an amount below Rs. 1 Lakh. The new rule is into effect from Jan 1st 2007. For small transactions the RBI has asked the banks to offer NEFT which provided T+0 and T+1 settlement system. Besides, RTGS facilitates online transfer where as NEFT involves four settlement cycles 9.30am, 10.30 am, 12.00pm and 4.00pm. Thus if a customer has given
the instruction to the bank to transfer the money through NEFT, money would be transferred on the same day. If the instruction is given later during the day money would be transfered the next day. RTGS is available in over 25000 branches where as NEFT is available in 9800 branches. For commercial banking all banks has put in RTGS facility where as only 43 banks has purchased the software required for NEFT. As of now RTGS facility can be accessable to the customers only upto 3pm and inter-bank transactions are possible upto 5pm.