The Reserve Bank of India (RBI) RECENTLY made changes in NEFT and RTGS systems for Foreign Contribution (Regulation) Act (FCRA) related transactions.
- NEFT, which stands for National Electronic Funds Transfer, is an electronic method of transferring money online.
- Most Indian banks provide the NEFT feature on internet banking and mobile banking.
- It enables transferring funds from the account maintained with any bank to any other bank branch, provided the transaction is attempted between the banks that participate in the NEFT payment system.
- Transactions made through NEFT do not take place in real-time.
- As per Reserve Bank of India (RBI) guidelines, the payments made via NEFT are processed and settled half hourly batches.
- NEFT transactions can be performed 24*7.
- Minimum Transfer Value: Rs. 1
- Maximum transfer value: No limit
- Money transfer made through NEFT does not require any additional transaction costs.
- RTGS, which stands for Real-time Gross Settlement, is a payment mode where the money is transferred from one bank account to the other in real-time, without any delay.
- It is mostly used for transactions of high value.
- When using the banking method, RTGS is the fastest possible way to transfer money.
- Transactions made through RTGS are processed on a one-to-one basis.
- RTGS transactions can be performed 24*7.
- Minimum Transfer Value: Rs. 2 lakh
- Maximum transfer value: No upper limit is there, but however can vary between banks.
Q1) What is the Foreign Contribution (Regulation) Act (FCRA)?
It is an act to consolidate the law to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest.