What is the difference between ECS, RTGS and NEFT?
Samit Kumar, Kochi
ECS refers to the Electronic Clearing System which is used by banks to transfer funds across banks and across locations. ECS enables quick transfer of funds from one bank to another through electronic mandates. For example, when you do an SIP, you can give your bank an ECS mandate, so that funds can be electronically transferred from your bank to the bank account of the mutual fund scheme in which you are investing. RTGS is Real Time Gross Settlement, which is the facility for paying for transactions in the debt market, on a real time basis, transferring funds and securities from one account to another electronically. NEFT refers to National Electronic Fund Transfer. This is the new and improvised version of ECS which enables clearing across the country, electronically, twice a day. Banks are able to participate in these systems depending on the infrastructure they have created and their readiness to implement these systems. A few banks are members of all these systems.