Dec 25, 2017

Can I transfer through NEFT without a Bank Account in India?

Stay Alert - Series 4

Let us first understand What is NEFT and then will discuss remitting funds using NEFT facility without having a Bank Account.
National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in India participating in the Scheme. For being a part of NEFT funds transfer network a Bank Branch has to be NEFT enabled. The participating Bank wise Branch list is provided on RBI Website.

Who can transfer funds through NEFT?
Individuals, firms or corporates maintaining accounts with a Bank Branch can transfer funds using NEFT.

If one does not have a Bank Account can He / She transfer Funds using NEFT facility?
Even such individuals who do not have a Bank Account (Bank walk-ins) can also Deposit cash at the NEFT-enabled branches with instructions to transfer funds using NEFT Facility. However, such Cash Remittances will be restricted to a maximum of ₹ 50,000/- per transaction. Such customers have to furnish full details including complete address, telephone number, etc. NEFT, thus, facilitates originators or remitters to initiate funds transfer transactions even without having a Bank Account.

Is there any Limit for transferring funds using NEFT?

No. There is no limit – either minimum or maximum – on the amount of funds that could be transferred using NEFT. However, maximum amount per transaction is limited to ₹ 50,000/- for cash-based remittances within India and also for remittances to Nepal under the Indo-Nepal Remittance Facility Scheme.

Why is IFSC is required for processing NEFT transactions?
IFSC or Indian Financial System Code is an alpha-numeric code that uniquely identifies a Bank-Branch participating in the NEFT system. This is an 11 digit code with the first 4 alpha characters representing the bank, and the last 6 characters representing the branch. The 5th character is 0 (zero). IFSC is used by the NEFT system to identify the originating / destination banks / branches and also to route the messages appropriately to the concerned banks / branches.

Can NEFT be used to transfer funds from / to NRE and NRO accounts?
Yes. NEFT can be used to transfer funds from / to NRE and NRO accounts in the country. This, however, is subject to the adherence of the provisions of the Foreign Exchange Management Act, 2000 (FEMA) and Wire Transfer Guidelines.

Can remittances be sent abroad using NEFT?
No. However, a facility is available to send outward remittances to Nepal under the Indo-Nepal Remittance Facility Scheme.

What is the structure of charges that can be levied on the customer for NEFT is given below:
a) Inward transactions at destination Bank Branches (for credit to beneficiary accounts)
– Free, no charges to be levied on beneficiaries
b) Outward transactions at originating Bank Branches – charges applicable for the remitter
- For transactions up to ₹ 10,000 : not exceeding ₹ 2.50 (+ Applicable GST)
- For transactions above ₹ 10,000 up to ₹ 1 lakh: not exceeding ₹ 5 (+ Applicable GST)
- For transactions above ₹ 1 lakh and up to ₹ 2 lakhs: not exceeding ₹ 15 (+ Applicable GST)
- For transactions above ₹ 2 lakhs: not exceeding ₹ 25 (+ Applicable GST)
c) Charges applicable for transferring funds from India to Nepal using the NEFT system (under the Indo-Nepal Remittance Facility Scheme) is available on the website of RBI.

With effect from 1st July 2011, originating Banks are required to pay a nominal charge of 25 paisa each per transaction to the clearing house as well as destination bank as service charge. However, these charges cannot be passed on to the customers by the banks.

These are the some of the Points covered to clear that one can transfer Funds using NEFT facility with in India. So we will be in a position whenever we come across any common man those who are not holding any Bank Account and needs to transfer money to his family at his native place.

Always Stay Alert and Stay Safe.. 

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