Record-Breaking NEFT Transactions Mark Surge in Electronic Payments

Record-Breaking NEFT Transactions Mark Surge in Electronic Payments

The Reserve Bank of India (RBI) announced on March 1, 2024, that the National Electronic Funds Transfer (NEFT) system witnessed its highest-ever daily number of transactions, reaching 4.10 crore on February 29, 2024.

Growth Trends in NEFT and RTGS

Over the past decade (2014-2023), both NEFT and Real Time Gross Settlement (RTGS) systems have shown significant growth:

  1. NEFT system:
    • Volume growth: 700%
    • Value growth: 670%
  2. RTGS system:
    • Volume growth: 200%
    • Value growth: 104%

These figures demonstrate substantial expansion in both volume and value for NEFT and RTGS systems, reflecting the increasing reliance on electronic payment systems.

Role of NEFT and RTGS

The Reserve Bank manages NEFT and RTGS systems for settling retail and wholesale payments, respectively. NEFT is primarily used for smaller transactions among individuals and businesses, while RTGS facilitates large-value transactions in real-time.

24x7x365 Functionality

On December 16, 2019, the NEFT system was made operational round-the-clock, seven days a week, 365 days a year. Similarly, the RTGS system was enabled for 24x7x365 functioning on December 14, 2020.

Multiple Choice Questions (MCQs)

  1. What was the highest number of daily transactions recorded by NEFT on February 29, 2024?
    • A) 4.10 million
    • B) 4.10 crore
    • C) 4.10 billion
    • D) 4.10 trillion
    • Answer: B) 4.10 crore
  2. Over the past decade (2014-2023), what percentage growth did the NEFT system witness in terms of transaction volume?
    • A) 200%
    • B) 400%
    • C) 500%
    • D) 700%
    • Answer: D) 700%
  3. What functionality was enabled for the NEFT system on December 16, 2019?
    • A) 24x7x365 functioning
    • B) International transactions
    • C) Real-time settlement
    • D) Cross-border payments
    • Answer: A) 24x7x365 functioning
  1. Which system is primarily used for settling large-value transactions in real-time?
    • A) NEFT
    • B) IMPS
    • C) UPI
    • D) RTGS
    • Answer: D) RTGS