Payment Systems: NEFT, RTGS, IMPS and UPI
How India's main electronic payment systems differ in settlement, timing, limits and operator – a quick comparison for exams.
Key points
- NEFT and RTGS are owned and operated by RBI; IMPS and UPI are operated by NPCI.
- NEFT runs 24x7 since 16 December 2019; RTGS runs 24x7 since 14 December 2020.
- RTGS minimum amount is ₹2 lakh; there is no upper limit.
- NEFT has no minimum or maximum amount prescribed by RBI.
- Payment systems are regulated under the Payment and Settlement Systems Act, 2007.
Gross vs net settlement
In gross settlement each transaction is settled individually and immediately. In deferred net settlement, transactions are bunched into batches and only the net position between banks is settled at set intervals.
Comparison table
| NEFT | RTGS | IMPS | UPI | |
|---|---|---|---|---|
| Operator | RBI | RBI | NPCI | NPCI |
| Settlement | Deferred net, half-hourly batches | Real-time gross | Instant to customer; inter-bank settlement in batches | Instant to customer; inter-bank settlement in batches |
| Availability | 24x7, all days | 24x7, all days | 24x7 | 24x7 |
| Minimum amount | None | ₹2 lakh | None | None |
| Maximum amount | No RBI cap (bank-set limits apply) | No cap | ₹5 lakh per transaction | ₹1 lakh generally; higher for specified categories |
| Typical use | Routine transfers of any size | High-value, time-critical payments | Instant transfers via account + IFSC or mobile | Everyday payments using VPA/QR on mobile |
Other systems worth knowing
- CTS (Cheque Truncation System): cheques are cleared through images, without physically moving the instrument.
- NACH: NPCI's bulk system for recurring credits (salary, subsidy) and debits (EMIs, SIPs) through mandates.
- AePS: Aadhaar Enabled Payment System for basic banking at business-correspondent points using biometric authentication.
- BBPS (Bharat Connect): interoperable bill payment system operated by NPCI Bharat BillPay.
- RuPay: India's domestic card network, also usable for credit cards on UPI.
Customer protection
- RBI's harmonised Turn-Around-Time framework requires banks to reverse failed transactions within fixed timelines or pay compensation to the customer.
- For unauthorised electronic transactions, the customer has zero liability if the bank is at fault, or if a third-party breach is reported within 3 working days; liability is limited if reported within 4–7 working days.
Exam tip: RTGS is the only system in this list with a minimum amount. NEFT settles in half-hourly batches, so it is "near real-time", not real-time.