RBI EFT is a Scheme introduced by Reserve Bank of India (RBI) to help banks offering their customers money transfer service from account to account of any bank branch to any other bank branch in places where EFT services are offered.The EFT system presently covers all the branches of the 27 public sector banks and 55 scheduled commercial banks at the 15 centres (viz., Ahmedabad, Bangalore, Bhubneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthpuram). Funds transfer is possible from any branch of these banks at these centres to other branch of any bank at these centres both inter-city and intra-city.

If the remitting bank transmits the funds transfer message to RBI so as to hit the first settlement at 12 noon, the receiving bank’s account is credited by RBI at the destination centre and beneficiary gets the credit on Day 1 itself. If the same is included in subsequent settlements i.e., for 2 pm and 4 pm, the beneficiary gets credit on Day 2.

RBI EFT system

Step-1: The remitter fills in the EFT Application form giving the particulars of the beneficiary (city, bank, branch, beneficiary’s name, account type and account number) and authorises the branch to remit a specified amount to the beneficiary by raising a debit to the remitter’s account.

Step-2: The remitting branch prepares a schedule and sends the duplicate of the EFT application form to its Service branch for EFT data preparation. If the branch is equipped with a computer system, data preparation can be done at the branch level in the specified format.

Step-3: The Service branch prepares the EFT data file by using a software package supplied by RBI and transmits the same to the local RBI (National Clearing Cell) to be included for the settlement of 12 noon, 2 pm and 4 pm.

Step-4: The RBI at the remitting centre consolidates the files received from all banks, sorts the transactions city-wise and prepares vouchers for debiting the remitting banks on Day-1 itself. City-wise files are transmitted to the RBI offices at the respective destination centres.

Step-5: RBI at the destination center receives the files from the originating centers, consolidates them and sorts them bank-wise. Thereafter, bank-wise remittance data files are transmitted to banks on Day 1 itself. Bank-wise vouchers are prepared for crediting the receiving banks’ accounts the same day or next day.

Step-6: On Day 1/2 morning the receiving banks at the destination centers process the remittance files transmitted by RBI and forward credit reports to the destination branches for crediting the beneficiaries’ accounts.

The primary modes of funds transfer at present are demand draft, mail transfer and telegraphic transfer. The demand draft facility is paper based. The remitter, after purchasing demand draft from a bank branch, dispatches the same by post/courier to the beneficiary. The beneficiary, in turn, lodges the draft to his/her bank for collection and clearing. The time taken for completing the process is about 10 days. In the case of telegraphic transfer, fund reaches the beneficiary either on the same day or the next; but both the remitter and the beneficiary would have to be account holders of the same bank. If they are customers of different banks, a good deal of paper processing is required. On the other hand, RBI EFT system is an inter-bank oriented system. RBI acts as an intermediary between the remitting bank and the receiving bank and effects inter-bank funds transfer. The customers of banks can request their respective branches to remit funds to the designated customers irrespective of bank affiliation of the beneficiary.

Limit on the amount of individual transaction?:-There is no value limit for individual transactions.

The receiving branch acknowledges every transaction it receives after crediting the beneficiary’s account. The acknowledgment particulars reach the remitting branch as an inward message on Day 3 of the EFT processing cycle. The remitting branch will, therefore, have precise information as to when the beneficiary’s account was credited.

No. It is not necessary for all branches to have computer systems. Branches can send the remittance details to their service branch in paper format (the copies of the EFT Application Forms submitted by the remitting customers accompanied by a Remittance Scroll). The Service branch will make data entry and transmit the funds transfer information electronically to local NCC. But, if a branch has computer facility, it can transmit funds transfer information electronically to its service branch either on a floppy or through a network. This would minimise the data entry work at the service branch.

Each participating bank has to identify a branch at the respective center to act as the link point for transmitting all outward messages and receiving all inward messages. The Service Branches/Main Branches of banks who have been coordinating the cheque-clearing work are in th
e best position to discharge this role. So no additional organisational infrastructure is required to be created.

Service Charge:- The levy of service charges by banks is left to the discretion of respective banks.

Benefit of the System to Banks:-

  • Banks can now provide inter-bank TT service.

  • Reconciliation is automatic.
  • Banks can make use of the EFT infrastructure for introducing new payment/cash management products to their customers.

The number of outstation cheques issued by customers and consequent service load on banks may decline over a period of time.

List of banks/branches having ECS/EFT facility

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October 2020