Difference between NEFT and RTGS?

NEFT is the abbreviation of National Electronic Fund Transfer, which is the online way of funds transfer of any financial institution, particularly for Indian banks. The upper limit for this service is fund transfer not more than INR 100,000.

However, Real Time Gross Settlement, as abbreviated (RTGS), is not used to transfer funds by banks that are below INR two lakh. This is as per the RBI’s latest 15 November 2010 instructions. Therefore, this banking regulator has asked the banks to provide NEFT that offers T+0 and T+1 settlement as per the time any customer delivers instruction for funds transfer to the bank, for smaller amounts.


So, the basic differentiation between these two systems is that RTGS is based on gross settlement and the NETF on net settlement. RTGS supports online transfers and NEFT works on four settlement cycle. There are 4 time slots in which the money transfer is enabled. So, if you surpass the last time slot to deliver instruction, you funds will be transferred the following day in first time slot.

Every commercial bank has included RTGS facility making the branches as above 25,000 yet there are about 43 banks that still facilitate NEFT in over 37000 branches.