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To bolster the Indian digital payments and settlement systems, the Reserve Bank of India made an announcement that the NEFT (National Electronic Funds Transfer) facility will be available for usage round the clock, 24 hours a day and 365 days a year.
This is in-line with the government’s vision to build a cashless economy, by facilitating banking needs beyond hours.
While the government and financial regulatory body is taking a lot of initiatives to bolster a cash-less economy and help small and medium business adopt digital payments as a defacto payment method, we at Cashfree keep making updates to our payment solutions to ensure that our merchants have a seamless payment experience.
What is NEFT?
NEFT is a fund transfer system that allows individuals to transfer funds from one account to another for given personalized upper limit by every bank.
Before, funds were transferred in an hourly shift between 8 am to 7 pm, and between 8 am to 1 pm on 1st and 3rd Saturday.
With the new regulations, NEFT settlements after banking hours are automated using the ‘Straight Through Processing (STP)’ mode by banks. The existing rule of crediting the beneficiary’s account or returning the transaction (within 2 hours of settlement of the respective batch) to the originating bank will continue, as RBI stated. Banks are supposed to send confirmation messages for all NEFT credits.
Benefits for Businesses
- Improved cash flow — The newest regulation allows businesses and individuals to make payments when they see fit. Therefore as an online business, you can make and expect timely payments with payment platforms like Cashfree. Which in turn, improves your cash flow.
- Faster settlements – happier partners and vendors — With 24×7 payment options, you wouldn’t have to wait to settle payments between you and your partners, as well as vendors. This improves partner and vendor relations as funds are released quickly which leads to faster order fulfilment chain.
Conclusion
It is encouraging that the government is proposing policies that are continuously pushing India towards a digital era. And with what’s coming next for Cashfree, this will be a win-win situation for businesses of all sizes, especially the entry to the mid-sized level market, which has always struggled with archaic banking technologies.
