Answer to Question #265157 in Accounting for Kajal

Question

Assume that you are one of the advisors to customers on Payment options.

a. There are multiple Electronic Payment options available in India. What electronic

payment option will you recommend for the following

1. A customer, Mr Raju who has a Savings Bank account with ‘Indian Bank’ Chennai wants

to make a one-off payment of Rs 10,000 urgently to Mr Alex who has a Savings Bank

account with Citi Bank Mumbai.

2. A corporate customer, ABC automobiles Limited that has a Current account with ‘Bank

of India’ Bangalore wants to pay a sum of Rs 1 crore urgently to another company called

XYZ automobiles who has a current account with State Bank of India, New Delhi.

Answer 1

1.National Electronic Funds Transfer (NEFT): There is no limit – either minimum or maximum – on the amount of funds that can be transferred using NEFT. With effect from January 01, 2020, banks have been advised to not levy any charges from their savings bank account holders for NEFT funds transfers initiated online.

2.Real Time Gross Settlement System: RTGS system is used only for large value transactions and retail transactions take an alternate channel of electronic funds transfer.