NEFT transactions won’t be available on May 23

May 18, 2021 Hot from the Oven Valli Sarvani No comments

Due to the technical upgrade of the National Electronic Funds Transfer (NEFT), bank customers will not be able to utilize the facility on Sunday, May 23, for 14 hours. The upgrade is aimed to improve performance and flexibility.

The Reserve Bank of India (RBI) released a notification on this matter yesterday. RBI said that the NEFT facility will not be available to customers from 00:01 hours to 14:00 hours on May 23.

In this context, RBI asked the member banks to inform their customers about this upgrade so that they can schedule their payments. Besides, banks are asked to send updated information through the NEFT system to their NEFT members.

NEFT is a nationwide centralised payment system. It is owned and operated by the RBI. Initially, the system was available for limited hours like during banking hours. But, now, this system is available on a 24×7 basis. The Reserve Bank made the facility available round the clock from December 16, 2019.

The technical upgrade for the Real-Time Gross Settlement (RTGS) was already completed last month. Hence, this technical upgrade will not affect the RTGS facility and customers can avail this facility as usual. Now, the NEFT facility will be upgraded.

While the NEFT facility is used for instant fund transfer for small amounts, RTGS is meant for large-value transactions.

Last month, RBI extended both the NEFT and RTGS facilities to non-bank payment system operators like Prepaid Payment Instrument (PPI) issuers, White label ATM operators etc. Hence, both these can be used across various payment systems. These include Trade Receivables Discounting System (TReDS) platforms and card networks.

The facility has been extended to non-bank payment system operators to benefit all user segments with a wider reach. It is likely to reduce settlement risk in the financial system.

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