NEFT (National Electronic Funds Transfer) - RTGS VS NEFT
Read all about the
NEFT or
National electronic funds transfer and what it means.
What is NEFT ?
NEFT stands for National electronic funds transfer. NEFT is another form of money transfer available in India. But it works a bit different from the RTGS.
You can transfer any amount of money through NEFT. There is no minimum amount as in the case with RTGS (2 lakhs). This is a big advantage NEFT has. But here the disadvantage is that the transfer of money takes place a bit slower. Transfer takes place in batches with similar transfers and hence will not be instant.
In NEFT, the main features are
- Settlement takes place only in batches
- Slower
- Any amount can be transferred. No minimum money or maximum money to transfer
- Bank charges Rs. 5 -25 depending upon the money transferred.
- Week days – works between 9:00 – 19:00 hours
- Saturdays - works between 9:00 – 13:00 hours
NEFT is perhaps the most common method of money transfer for the normal public.
If you have any doubts regarding this topic please do comment below
What is NEFT ?
NEFT stands for National electronic funds transfer. NEFT is another form of money transfer available in India. But it works a bit different from the RTGS.
You can transfer any amount of money through NEFT. There is no minimum amount as in the case with RTGS (2 lakhs). This is a big advantage NEFT has. But here the disadvantage is that the transfer of money takes place a bit slower. Transfer takes place in batches with similar transfers and hence will not be instant.
In NEFT, the main features are
- Settlement takes place only in batches
- Slower
- Any amount can be transferred. No minimum money or maximum money to transfer
- Bank charges Rs. 5 -25 depending upon the money transferred.
- Week days – works between 9:00 – 19:00 hours
- Saturdays - works between 9:00 – 13:00 hours
NEFT is perhaps the most common method of money transfer for the normal public.
If you have any doubts regarding this topic please do comment below
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RTGS or Real Time Gross Settlement -Bank Term Explained
Read all about the RTGS or Real Time Gross Settlement and what it means.
Gross settlement means that the money transfer will take place individually and that the money transfer order will not be clubbed with other similar transactions.
RTGS has some peculiar features which you will need to understand
- Real time money transfer
- Instant transfer
- No waiting period
- Transfer amount should be minimum of 2 lakhs
- No upper ceiling. Can transfer any amount of money above 2 lakhs
- Bank charges for the outward transaction will be in the range of Rs. 25 -50.
- Inward money transfer is free
- Week days - works between 9:00 – 16:30 hours
- Saturdays - works between 9:00 – 13:30 hours
RTGS method of money transfer is perfect particularly for the businessmen who trades high amount of money. It is also very much useful in an urgent situation where in you will need to transfer a huge sum instantly.
What is RTGS?Real time means that the money will be transferred always in real time. In common words it means that there will e no waiting period for the money transfer. The money will be transferred instantly.
Gross settlement means that the money transfer will take place individually and that the money transfer order will not be clubbed with other similar transactions.
RTGS has some peculiar features which you will need to understand
- Real time money transfer
- Instant transfer
- No waiting period
- Transfer amount should be minimum of 2 lakhs
- No upper ceiling. Can transfer any amount of money above 2 lakhs
- Bank charges for the outward transaction will be in the range of Rs. 25 -50.
- Inward money transfer is free
- Week days - works between 9:00 – 16:30 hours
- Saturdays - works between 9:00 – 13:30 hours
RTGS method of money transfer is perfect particularly for the businessmen who trades high amount of money. It is also very much useful in an urgent situation where in you will need to transfer a huge sum instantly.
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Bank Rate -Repo Rate vs Bank Rate - Bank Term Explained
Read all about the
Bank rate and how reserve bank of India uses the
Bank rate as a tool to control the money floating in the market.
What is Bank Rate?
Bank rate is the interest rate charged by the reserve bank of India on the banks and financial institution for the loans and advances provided to them.
How RBI uses the bank rate?
RBI uses the bank rate to control the money floating. Let us see how it happens.
If the RBI increases the bank rate
Increase in bank rate means that the banks will have to pay more money to the RBI as interest and hence the banks will look to increase the lending rate to customers. It means that any increase in bank rate will cause a subsequent increase customer lending rate of the banks.
In this scenario with the increased interest rate customers will not take the loans and hence the money will be kept back in the money market.
If the RBI decreases the bank rate
It will mean decrease in customer lending rate and it will mean more loans will be taken from the bank.
RBI uses this tool to control the bank credit.
Many people would now say that the repo rate is exactly the same as bank rate. But it is not so. Here are the main differences between the bank rate and the repo rate.
Repo rate
- Short term loan
- Just to meet the working capital demands in urgent cases
- Banks will have to sell the securities or bonds to the RBI as an assurance along with another agreement to pay back within a certain period
Bank rate
- Long term
- Probably die to any new monetary policy
- No need of securities
If you have any doubts regarding this topic please do comment below
Bank rate is the interest rate charged by the reserve bank of India on the banks and financial institution for the loans and advances provided to them.
How RBI uses the bank rate?
RBI uses the bank rate to control the money floating. Let us see how it happens.
If the RBI increases the bank rate
Increase in bank rate means that the banks will have to pay more money to the RBI as interest and hence the banks will look to increase the lending rate to customers. It means that any increase in bank rate will cause a subsequent increase customer lending rate of the banks.
In this scenario with the increased interest rate customers will not take the loans and hence the money will be kept back in the money market.
If the RBI decreases the bank rate
It will mean decrease in customer lending rate and it will mean more loans will be taken from the bank.
RBI uses this tool to control the bank credit.
Many people would now say that the repo rate is exactly the same as bank rate. But it is not so. Here are the main differences between the bank rate and the repo rate.
Repo rate
- Short term loan
- Just to meet the working capital demands in urgent cases
- Banks will have to sell the securities or bonds to the RBI as an assurance along with another agreement to pay back within a certain period
Bank rate
- Long term
- Probably die to any new monetary policy
- No need of securities
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Cash Reserve Ratio(CRR) and Statutory Liquidity Ratio (SLR) - Bank Term Explained
Read all about the
Cash reserve ratio and Statutory Liquidity Ratio and how reserve bank of India uses the CRR and SLR as a tool to control the money floating in the market.
What
is CRR Rate?
Cash
reserve ratio is explained as the minimum fund a bank is needed to deposit with
the RBI.
If CRR
rate increase
If the
RBI increases the CRR rate, then it means that the amount of money with the
banks will come down as banks have to deposit more money with the reserve bank.
So RBI
is using CRR as monetary tool to regulate the banking sector. If there is
excess money in the system, reserve bank will increase the CRR rate which will
need the banks to deposit more money with the reserve bank.
If CRR
rate decreases
This is
an indication that there si very less money in the market and hence RBI has
reduced the CRR rate. So that banks need not deposit more money with the
reserve bank.
What
is SLR Rate?
SLR
stands for Statutory
Liquidity Ratio. Banks are supposed to keep a certain amount of money as
reserve before providing credit to the customers. The reserve money can be in
the form of cash, gold or government approved securities. This amount has to be
maintained by the bank at all times.
SLR rate is
determined by the percentage of total demand and net liabilities.RBI uses this
tool to control the flow of money a s credit from the bank to the customers. So
SLR rate is another monetary too used by the RBI to regulate the market.
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Reverse Repo Rate (RRR) and How RBI uses This Tool - - Banking Term Explained
Read all about the reverse repo rate and how reserve bank of India uses the reverse repo rate as a tool to control the money floating in the market.
Reverse repo rate is the opposite of the repo rate in the reverse repo rate the reserve bank of India borrows money from the banks and financial institutions. You may think why the reserve bank of India needs to borrow money. This borrowal of money is done to regulate the banking sector and to keep the excess money out of the money market.
By borrowing money from the banks, the excess money from the system is drained out. Banks are always eager to lend money to the reserve bank as that amount of money is sure to get good interest and the money will be safe.
If there is more money in the banking system
In this case the reserve bank will increase the reverse repo rate which will make sure that the banks will lend more money to the reserve bank (since that money would earn more interest) and thus bringing down the excess money from the banking sector.
If there is less money floating
Then the reserve bank will reduce the reverse repo rate. So banks will not be happy to lend money to the reserve bank and thus the money will be kept back in the money market.
Reserve bank of India is using reverse repo rate as a tool to control the flow of money within the system.
Reverse repo rate is the opposite of the repo rate in the reverse repo rate the reserve bank of India borrows money from the banks and financial institutions. You may think why the reserve bank of India needs to borrow money. This borrowal of money is done to regulate the banking sector and to keep the excess money out of the money market.
By borrowing money from the banks, the excess money from the system is drained out. Banks are always eager to lend money to the reserve bank as that amount of money is sure to get good interest and the money will be safe.
If there is more money in the banking system
In this case the reserve bank will increase the reverse repo rate which will make sure that the banks will lend more money to the reserve bank (since that money would earn more interest) and thus bringing down the excess money from the banking sector.
If there is less money floating
Then the reserve bank will reduce the reverse repo rate. So banks will not be happy to lend money to the reserve bank and thus the money will be kept back in the money market.
Reserve bank of India is using reverse repo rate as a tool to control the flow of money within the system.
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How Do Doctors Make Money? Ways For a Doctor to Get Paid
How do doctors make money?
Being a doctor is one of the most respected professions all over the world. But have you ever thought how doctors make money? In fact we know they charge you for fees every time for their consultation. But is it the only way doctors makes bucks?
First of all let us begin this post with a disclaimer that doctors are just another breed of professionals who are looking at earning money from the work they do. And what is wrong in it if a doctor is well paid for the job he does? Nothing. But when you look closely at the ways a doctor can make money, it seems like the best job for anyone. No wonder we can see a lot of students clamoring for the MBBS seats every year. In India well off parents are happy to give away 50 -60 lakhs for admission to a medical college (as donation). This mentality arises from the well known knowledge that the children will have a bright future as a doctor and will be able4 to earn back the money spent with profit.
So let us see the ways a doctor can make money. How to make money as a doctor?
Being a doctor is one of the most respected professions all over the world. But have you ever thought how doctors make money? In fact we know they charge you for fees every time for their consultation. But is it the only way doctors makes bucks?
First of all let us begin this post with a disclaimer that doctors are just another breed of professionals who are looking at earning money from the work they do. And what is wrong in it if a doctor is well paid for the job he does? Nothing. But when you look closely at the ways a doctor can make money, it seems like the best job for anyone. No wonder we can see a lot of students clamoring for the MBBS seats every year. In India well off parents are happy to give away 50 -60 lakhs for admission to a medical college (as donation). This mentality arises from the well known knowledge that the children will have a bright future as a doctor and will be able4 to earn back the money spent with profit.
So let us see the ways a doctor can make money. How to make money as a doctor?
- Consultation fees
If you are visiting a doctor who runs a private clinic you will have to pay him the consultation fees every time you visit him. If suppose the doctor works for a big specialty hospital then hospital will charge you for the service taking along their cut too. Reasonable. This way of making money is known to everyone and is accepted by the general public.
What is in it for the doctors? If you watch closely the system, you can see that the doctor will recommend every patient to only this lab and in return the lab pays the doctor a percent commission for each patient referred. Here what happens is the total cost of laboratory test increases steadily as the labs have to pay a n certain sum of money to the doctors again. No wonder health treatment In India is becoming too costly.
- Commission from pharmacy companies
A doctor will be approached by the so called medical representatives working for the pharmaceutical companies and will be offered various offers to recommend their company product to the patients. Remember that the normal patients would not dare to go against the doctors words and is sure to buy the medicine recommended by the doctor.
The offers given to the doctor even includes 30% of the MRP of the medicine. Some doctors have also got the offers like foreign trips free of cost by the companies.
The offers given to the doctor even includes 30% of the MRP of the medicine. Some doctors have also got the offers like foreign trips free of cost by the companies.
- Commission from the nearby labs
If suppose the doctor is working privately in a clinic, you can expect that the doctor will recommend you to the laboratories nearby for various tests.
What is in it for the doctors? If you watch closely the system, you can see that the doctor will recommend every patient to only this lab and in return the lab pays the doctor a percent commission for each patient referred. Here what happens is the total cost of laboratory test increases steadily as the labs have to pay a n certain sum of money to the doctors again. No wonder health treatment In India is becoming too costly.
- Commission from diagnostic centers
This way of making money is exactly similar to the point mentioned above. Doctors refer the patient to a particular diagnostic centre for the X-RAY tests and other test and in return get paid sitting at home. This way of commission system is the real disaster of the Indian health policy which makes the doctors the king.
What is extremely difficult to understand is this small eventuality. An MBBS student while writing his exam papers will be happy to write down the word “CETRIZINE” as the medicine for common cold. After graduating as a doctor when a patient comes in front of him for common cold he would have no issues writing down “CETZINE” on the prescription paper.
Please note that the doctor has not recommended anything wrong. But he has recommended the branded version of the drug CETRIZINE – CETZINE. Only difference seems to be that while CETRIZINE costs Rs.1.20 for 10 tablets, the branded drug CETZINE will have a price tag of Rs.35 for 10 tablets.
Do you really feel that this method of squeezing the patients directly and indirectly is the best way for doctors to make money?
What is extremely difficult to understand is this small eventuality. An MBBS student while writing his exam papers will be happy to write down the word “CETRIZINE” as the medicine for common cold. After graduating as a doctor when a patient comes in front of him for common cold he would have no issues writing down “CETZINE” on the prescription paper.
Please note that the doctor has not recommended anything wrong. But he has recommended the branded version of the drug CETRIZINE – CETZINE. Only difference seems to be that while CETRIZINE costs Rs.1.20 for 10 tablets, the branded drug CETZINE will have a price tag of Rs.35 for 10 tablets.
Do you really feel that this method of squeezing the patients directly and indirectly is the best way for doctors to make money?
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