How NEFT Transactions Are Processed on Bank Holidays or Closing Days
National Electronic Funds Transfer (NEFT) is a popular method of transferring money between bank accounts in India. However, the processing of NEFT transactions can be affected by weekends and bank holidays. This article explains how NEFT transactions are processed when they are initiated on a Friday at 5 PM, and the next day is the second Saturday when the banks are closed.
Understanding NEFT Transaction Processing
Neft operates in specific batches during banking hours. Typically, NEFT transactions initiated after the last batch on Friday at around 7 PM will not be processed until the next working day. Since Saturday is a second Saturday and banks are closed, the transaction will queue until the next working day, which would be Monday. Therefore, the recipient will receive the funds on Monday, assuming there are no other holidays affecting the banking schedule.
NEFT Transaction Timing and Batch Cycles
The NEFT transaction timings were from 8 AM to 7 PM. However, effective from December 2019, the RBI liberalized these timings to round the clock. Hence, NEFT transactions initiated at 5 PM can be transmitted and materialized effectively at that time.
The amount would be deducted from the sender's account but settled on the next available clearing slot. If Monday is a working day, the transaction would be cleared in the 0630 batch.
Immediate Payment Service (IMPS) for Urgent Transactions
If urgent funds are needed for situations such as medical expenses, immediate payment service (IMPS) is an alternative option. IMPS is an instant, real-time inter-bank electronic funds transfer system in India, managed by the National Payments Corporation of India (NPCI). Unlike NEFT, IMPS is available 24/7, even on bank holidays.
Effective from December 2019, the RBI has made NEFT services available on a 24 x 7 basis, meaning customers can transfer funds even during weekends.
NEFT Transaction Limits and Security
It's important to note that while NEFT transactions can now be processed 24/7, there are still limits and security measures in place. The maximum amount that can be transferred through NEFT is currently ?5 lakh per transaction and ?20 lakh per day. These limits help ensure the safety of transactions.
Security measures such as customer verification, secure transaction channels, and encryption are employed to protect the transferring and receiving parties.
Conclusion
In summary, when a NEFT transaction is initiated on a Friday at 5 PM and the next day is a second Saturday when banks are closed, the transaction will remain in queue and get credited when the core banking system starts functioning at the specified time on the next working day. Alternatively, for urgent needs, IMPS offers instant fund transfers throughout the year, 24/7, even on holidays. These features highlight the flexibility and convenience of NEFT and its advancement towards being a round-the-clock service.
For more information on NEFT and related transactions, please refer to the official RBI and NPCI websites.