Fund Transaction Modes For The Millennial Indian

Digital Indian

India is transforming into a digitally empowered society making us adapt to a different way of doing monetary transactions. Digital modes of transactions are slowly but surely replacing obsolete modes like Money Orders and Demand Drafts.

Listed below are RBI and National Payments Corporation of India (NPCI) approved modes of transaction. These don’t include Bitcoin or Blockchain as they are yet to be recognized by RBI.


NEFT (National Electronic Funds Transfer)

NEFT is an electronic fund transfer system whereby bank customers can directly transfer funds between 2 NEFT enabled banks. The transfer occurs in hourly batches with a transaction limit of Rs.200,000. The sender needs to have the Netbanking facility activated to add a beneficiary and initiate the fund transfer.


RTGS (Real Time Gross Settlement)

RTGS is a fund transfer mechanism for amounts larger than Rs.200,000. RTGS too can be used via Netbanking and the account holder of a bank must update the beneficiary’s name, bank and the account number to initiate the transfer.


IMPS (Immediate Payment Service)

IMPS is managed by NPCI. Publicly launched in 2010, IMPS allows instant real time fund transfer, through mobile phones. Unlike RTGS and NEFT, IMPS is available 24/7 throughout the year including on bank holidays. The limit for the transaction is up to Rs.200,000.


ECS (Electronic Clearing Services)

ECS is divided into 2 services – ECS Credit and ECS Debit. The Credit service is a credit push facility for one-to-many and mostly used for large value bulk payments. The ECS Debit aspect involves many to one and used mainly for small value payments. To make use of ECS the bank has to be informed with a mandate by the authorized entity for the bank to transfer the amount directly.


NACH (National Automated Clearing House)

NACH was started in 2016 and is a web based solution to authorize and facilitate transactions. It is an automated form of ECS which is safer and faster.


UPI (Unified Payments Interface)

UPI was launched in 2016 by NPCI. It provides fund transfer service between bank accounts via mobile platform. It is an advanced version of IMPS.

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