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NEFT & RTGS

Banking / Economy Awareness · Payments & Financial Infrastructure

Overview

NEFT and RTGS are RBI-run electronic fund transfer systems; NEFT settles in half-hourly batches, RTGS settles each large transaction in real time.

Key points

Both are owned and operated by the RBI.
NEFT has been available 24×7 since 16 December 2019; it settles in half-hourly batches.
NEFT has no minimum or maximum limit set by the RBI.
RTGS is for transfers of ₹2 lakh and above, settled individually in real time.
RTGS has been available 24×7 since 14 December 2020.

Explanation

IFSC of the beneficiary branch is needed for both.
RBI has waived its own charges on online NEFT/RTGS for savings customers; banks set their own policy.
RTGS is "gross" — each transaction settles separately, not netted.
IMPS (by NPCI) is instant and also 24×7.

Step by step

Identify the institution, rule or instrument asked.
Recall its definition, year, limit or function from a table.
Eliminate options from similar institutions or older rules.

Examples

Minimum amount for RTGS → ₹2 lakh.
NEFT settlement happens in → half-hourly batches.
RTGS became 24×7 in → December 2020.

Traps and advanced points

Trap: Thinking NEFT has a ₹2 lakh minimum.
Trap: Calling RTGS a batch system.
Trap: Saying NPCI runs RTGS.

Quick revision

RTGS ≥ ₹2 lakh, real time.
NEFT batches, no limit.
Both RBI, both 24×7.

Practice MCQs

Which term-description pair is correctly matched for the concept “moratorium”?
1. SLR — temporary deferment arrangement under specified loan terms/rules
2. moratorium — temporary deferment arrangement under specified loan terms/rules
3. moratorium — mechanisms used to absorb surplus liquidity from the banking system
4. moratorium — Non-Performing Asset
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Answer: (b) moratorium — temporary deferment arrangement under specified loan terms/rules. Interest treatment depends on the specific scheme/contract.
In banking/finance, what does “EMI” refer to most accurately?
1. Equated Monthly Instalment
2. Know Your Customer
3. temporary deferment arrangement under specified loan terms/rules
4. rate at which RBI lends short-term funds against eligible collateral under the liquidity framework
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Answer: (a) Equated Monthly Instalment. Periodic loan payment combining principal and interest components.
In banking/finance, what does “PFRDA” refer to most accurately?
1. mechanisms used to absorb surplus liquidity from the banking system
2. statement of revenue and expenses over a period
3. Pension Fund Regulatory and Development Authority
4. Insurance Regulatory and Development Authority of India
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Answer: (c) Pension Fund Regulatory and Development Authority. Regulates pension-system areas under its mandate.
In banking/finance, what does “credit risk” refer to most accurately?
1. access to useful and affordable formal financial services
2. risk that a borrower/counterparty fails to meet obligations
3. Insurance Regulatory and Development Authority of India
4. bank promise to pay beneficiary on specified default/conditions
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Answer: (b) risk that a borrower/counterparty fails to meet obligations. Core risk in lending.
In banking/finance, what does “moratorium” refer to most accurately?
1. Unified Payments Interface
2. Anti-Money Laundering
3. temporary deferment arrangement under specified loan terms/rules
4. summary indicator derived from credit-history data
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Answer: (c) temporary deferment arrangement under specified loan terms/rules. Interest treatment depends on the specific scheme/contract.
NEFT and RTGS are operated by the —
1. NPCI
2. SBI
3. SEBI
4. RBI
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Answer: (d) RBI. RBI.
NEFT has been available 24×7 since —
1. December 2019
2. December 2020
3. April 2016
4. January 2022
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Answer: (a) December 2019. 16 December 2019.
NEFT settles transactions in —
1. once a day
2. weekly
3. half-hourly batches
4. real time individually
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Answer: (c) half-hourly batches. Batches.
RTGS is meant for transfers of at least —
1. ₹5 lakh
2. ₹10 lakh
3. ₹1 lakh
4. ₹2 lakh
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Answer: (d) ₹2 lakh. ₹2 lakh.
RTGS settles transactions —
1. individually in real time
2. monthly
3. manually
4. in batches
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Answer: (a) individually in real time. Real-time gross settlement.