- Meaning: A bank draft (demand draft) is a cheque issued by a bank on its own branch or another bank, payable on demand to a specified person.
- Safety: It is a safe and reliable method of transferring money, as there is no risk of dishonour.
- Issue Procedure: The purchaser deposits the required amount and pays a small commission to the bank, which then issues the draft.
- Payment: The payee can receive the amount by presenting the draft at the drawee bank.
- Online Facility: Bank drafts can also be obtained online, with the amount and charges directly debited from the account or credit card.
Key Points
Key Points: Real Time Gross Settlement (RTGS)
- Meaning: RTGS is a system for instant transfer of funds between banks on a real-time and one-to-one basis.
- Speed: Transactions are settled immediately without waiting or batching.
- Amount Limit: Minimum transfer is ₹2 lakh; there is no maximum limit.
- Availability: RTGS is available only at CBS-enabled bank branches during banking hours.
- Finality: Once processed, the transfer is final and cannot be reversed.
Key Points: National Electronic Funds Transfer (NEFT)
- Meaning: NEFT is a nationwide electronic fund transfer system used to transfer money from one bank account to another in India.
- Settlement: NEFT transactions are processed in batches at fixed times, not instantly.
- Account Requirement: Sender may transfer money with or without a bank account, but the receiver must have an account in a NEFT-enabled bank.
- Amount Limit: No minimum or maximum limit when transferring from a bank account; without account, limit is ₹49,999.
- Charges: Sender pays nominal charges, while the receiver pays no charges.
Key Points: Difference between NEFT and RTGS
| NEFT | RTGS |
|---|---|
| Batch transfer | Real-time transfer |
| Slower | Instant |
| No minimum limit | Minimum ₹2 lakhs |
| Limited timings | Continuous processing |
| Small payments | Large payments |
Key Points: Immediate Payment Service (IMPS)
- IMPS is an instant fund transfer system managed by NPCI, allowing real-time money transfer between banks.
- Available 24×7 throughout the year, including Sundays and holidays.
- Can be used through mobile banking and internet banking using MMID or bank details.
- Fast and reliable – money is credited immediately and alerts are sent to both sender and receiver.
- Low transaction charges and suitable for small as well as large payments.
Key Points: Electronic Banking (E-Banking)
- E-banking means doing banking transactions through the internet using computers or mobile devices.
- It provides 24×7 banking services, allowing customers to transact anytime and from anywhere.
- No physical visit to the bank is required, saving time and effort for customers.
- It increases efficiency for banks by reducing branch workload and using a centralised database.
- It has limitations, including high technological costs, the need for training, and the risk of technical errors.
Key Points: Main Forms of E-Banking
- Electronic Funds Transfer (EFT) allows direct transfer of money between bank accounts, such as salaries, pensions, bills, and loan instalments, safely and on time.
- ATM (Automated Teller Machine) enables customers to withdraw or deposit cash and access banking services 24×7 without visiting the bank branch.
- Debit Card allows payment and cash withdrawal only up to the amount deposited in the bank account; no credit facility is provided.
- Credit Card provides a credit facility where payment is made after use; the cardholder must have good creditworthiness.
- Core Banking Solution (CBS) allows customers to operate their account from any branch of the same bank across the country.
- Mobile Banking and SMS Alerts enable customers to perform transactions, pay bills, and receive instant updates on account activity through mobile phones.
- Tele Banking and Internet Banking provide balance enquiry, fund transfer, and other services remotely, reducing the need for physical bank visits.
Key Points: Bank Draft
Important Questions [11]
- Explain the meaning of gross working capital.
- Distinguish Between Neft and Rtgs.
- Give any two features of RTGS.
- Rita wants to tranfer their first salary to her mother's bank account through RTGS. What is the minimum amount that she can transfer through RTGS?
- What is Meant by Neft? Give Any Two Features of Neft.
- Rajiv's daughter has secured a seat in a Law college. The college has asked for the payment of admission fee through the financial instrument payable on demand.
- What is the Demand Draft?
- Mention Any Two Advantages of E-banking to the Customers.
- With reference to Credit Card, which one of the following statements is INCORRECT?
- Answer the Question Briefly. What is a Debit Card?
- State any three differences between a debit card and a credit card.
Concepts [10]
- Concept of Online Services
- Transfer of Funds Through Real Time Gross Settlement (RTGS)
- Banking Services with Particular Reference - National Electronic Fund Transfer
- Issue of Demand Drafts Online
- Banking
- Advantages and Disadvantages of Online Payments, E-banking
- Advantages and Disadvantages of Mobile Banking
- Debit Cards Vs Credit Cards, ATM (Automated Teller Machine)
- Differences Between Debit Card and Credit Card
- Overview of Banking - Latest Trends
