Banks to migrate to NEFT

Mumbai, Nov 17 | Updated: Nov 18 2005, 05:30am hrs
The Reserve Bank of India (RBI) has decided to discontinue the special electronic funds transfer system (SEFT) from January 1, 2006, and has put in place a plan for all banks to migrate to the national electronic funds transfer (NEFT) system, by that date.

In a notification to scheduled commercial banks, the central bank announced that The NEFT system will be going live from November 21, 2005, with one settlement at 12 noon every day. The testing process of the NEFT is over and the NEFT application has since stabilised, the RBI told banks.

The apex bank has also informed banks that the frequency of NEFT would be scaled up to three transactions per day by January 1, 2006, completely replacing the SEFT system.

Initially, the NEFT will start with eight banks and progressively increase to cover all the banks which are presently participating in the SEFT clearing, the central bank said. Meanwhile, the RBI has proposed to migrate all the present SEFT banks to NEFT by December 15, 2005. NEFT is structured based on financial messaging solution (SFMS) platform and is public key infrastructure (PKI) enabled. The RBI has advised banks to be ready with SFMS so as to join NEFT at an early date.

On Course

The NEFT system will be going live from Nov 21, with one settlement at 12 noon every day
Frequency of the NEFT would be scaled up to three transactions per day by Jan 1, 2006
The NEFT will start with eight banks and progressively increase to cover all the banks which are presently participating in the SEFT clearing