Introduction to NEFT Transactions

National Electronic Funds Transfer (NEFT) is a fund transfer method that was launched in 2005 and allowed two parties to transfer and receive funds electronically. NEFT can be used to make payments nationwide and is operated by the Reserve Bank of India (RBI), making it a centralized payment system that is extremely simple to use and highly secure. 

But when it comes to NEFT transfers, one of the frequently asked questions is about the NEFT timings, NEFT settlement time, and other restrictions to sending money via NEFT payments. So to help answer this and other questions you may have about NEFT, continue reading to find out! 

NEFT Transfer Timings (Old Vs. New Guidelines)

Before December 2019, there was a time limit for NEFT payments that could be processed only between 8 AM and 6:30 PM from Monday to Friday and 8 AM to 12 PM on Saturdays. In addition, on bank holidays, the NEFT payment would be on hold and processed only during official banking hours.

However, per the new guidelines that kicked in in 2020, there are no restrictions on NEFT transfer time. This means that NEFT transaction time is now 24*7, which is a welcome step in promoting digital transactions in India. 

How Much Time Does NEFT Transfer Take?

To know the NEFT settlement time, we must first look at how the NEFT process works. First, an NEFT is initiated once the user inputs all the required information for the NEFT to be processed. Then, once the user hits submit, the NEFT request is queued up and cleared in batches every hour. 

If the NEFT transaction is initiated after banking hours, the payment will be initiated using the Straight Through Process (STP) mode. The beneficiary and the sender can both track the status of an NEFT payment using the bank’s NEFT Customer Facilitation Center (CFC) and will need to provide the required details to get an update. 

A standard NEFT payment will take up to two hours for the amount to be credited to the beneficiary’s account. However, in some cases, it may take more time, and it is best to check with the CFC in case of further delays. 

What Happens if the Amount Is Not Transferred to the Beneficiary’s Account?

If, for some reason, the NEFT transaction is not credited to the receiver’s account, the bank is liable to return the sum immediately to the sender. If that is also not done within two hours of the delay, the bank is liable to pay penalty interest to the affected customer per the RBI guidelines.

The RBI LAF Repo Rate is applied for the penalty plus a 2% for delay till the time the funds are credited to your account. Customers can quickly get their grievances regarding any payment resolved with the CFC or register a complaint with the Reserve Bank of India Integrated Ombudsman Scheme. Customers can complain if the grievance is not resolved within 30 days. 

When to Use NEFT Transfer?

NEFT is the ideal method for transferring funds electronically in India, but in conditions where:

  • Any individual, company, or entity has an NEFT-enabled bank account.
  • The bank of the user’s financial institution is part of the NEFT network.
  • The receiver has their internet banking activated.
  • The receiver has shared their bank account number, IFSC Code, and branch location. If this information is not known, or wrong information is input, the NEFT payment may not go through.
  • The amount to be sent is within the maximum limit set by each bank. Although there are no restrictions on the maximum amount per RBI guidelines, banks have been allowed to set an upper cap to ensure protection for their customers.


NEFT is a highly convenient way to send and receive funds, and there is no NEFT timing as per the new mandate. So anyone can make NEFT transactions even on holidays, and it is swift and cost-effective, enabling any local fund transfers to be done easily. 


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