Electronic fund transfer system – Reserve Bank of India

Reserve Bank of India

What is RBI-EFT System?
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.

At how many centres and bank branches is the

EFT facility available?
The EFT system presently covers all the branches of the 27
public sector banks and 55 scheduled commercial banks at the
15 centres (viz., Ahmadabad, Bangalore, Bhubaneswar, 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.

What is the funds availability schedule for the

beneficiary?
The remitting bank transmits the funds transfer message to RBI
so as to reach NCC, before the cut off time for the settlement,
the receiving bank’s account is credited by RBI at the
destination centre and beneficiary gets credit on the same day.
How does the RBI EFT system operate?
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
authorizes 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.
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 centre receives the files from the
originating centres, 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 centres process the remittance files transmitted by
RBI and forward credit reports to the destination branches for
crediting the beneficiaries’ accounts.

How is this RBI EFT System an improvement

over the existing facilities?
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.
Any limit on the amount of individual
transaction?
There is no value limit for individual transactions.

What is the procedure for acknowledgment?

How would the sending branch know that the
remitted amount has been credited to the
beneficiary?
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.

Is it necessary for all branches to install

computer system?
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 minimize the data entry work at the service branch.
What additional organisational structure banks
would be required to create?
Each participating bank has to identify a branch at the respective
centre 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 the best position to discharge
this role. So no additional organisational infrastructure is
required to be created.

What about Processing charges/Service charges

While RBI has waived processing charges till March 31, 2008,
levy of service charges by banks is left to the discretion of
respective banks

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