A BEFTN transfer is an electronic method for moving money between different bank accounts in Bangladesh without the physical exchange of cash. It serves as a modern, efficient, and cost-effective way to conduct various financial transactions.
Understanding the Bangladesh Electronic Funds Transfer Network (BEFTN)
The Bangladesh Electronic Funds Transfer Network (BEFTN) is an automated system designed for the transfer of money from one bank to another bank without money changing hands. This powerful digital infrastructure facilitates a wide array of financial operations, making banking more accessible and convenient for individuals and businesses alike across Bangladesh.
Key characteristics of BEFTN transfers include:
- No Additional Charges: Users typically do not incur additional fees for initiating or receiving funds through this system, making it an economical choice for many transactions.
- Efficient Processing: Transfers are generally completed within 48 hours, providing a reliable timeframe for funds to reach the recipient's account.
- Secure and Reliable: Operating under the oversight of the central bank, BEFTN ensures a standardized and secure environment for all electronic transactions.
How BEFTN Works
BEFTN operates on a batch processing system, meaning that transactions are collected over a period and then processed together. This differs from real-time systems where each transaction is processed individually as it occurs.
Here's a simplified overview of the process:
- Initiation: A sender instructs their bank to transfer funds to a recipient's account at another bank. This can be done via online banking, mobile apps, or by visiting a bank branch.
- Batching: The sender's bank collects multiple BEFTN requests throughout the day.
- Clearing House: These batches of transactions are then sent to the BEFTN clearing house, managed by Bangladesh Bank, which acts as an intermediary.
- Settlement: The clearing house processes the transactions, debits the sender banks' accounts, and credits the recipient banks' accounts.
- Credit to Recipient: The recipient bank then credits the funds to the recipient's specific account.
Types of BEFTN Transactions
BEFTN supports two primary types of electronic fund transfers:
1. Credit Push Transactions (BEFTN Credit)
In a credit push, the sender initiates the transfer to credit the recipient's account. These are common for:
- Salary disbursements: Employers paying employees.
- Vendor payments: Businesses paying suppliers.
- Pension payments: Regular payouts to retirees.
- Dividend payments: Companies distributing profits to shareholders.
- Government payments: Welfare benefits or subsidies.
2. Debit Pull Transactions (BEFTN Debit)
In a debit pull, the recipient (or a third party authorized by the recipient) initiates a request to pull funds from the sender's account. This requires prior authorization (mandate) from the sender. Examples include:
- Utility bill payments: Electricity, gas, or water bills directly debited.
- Loan installment payments (EMIs): Automatic deductions for loan repayments.
- Insurance premium payments: Regular premium deductions.
- Subscription fees: Recurring payments for services.
Key Benefits of Using BEFTN
BEFTN offers significant advantages for both individuals and businesses:
- Cost-Effectiveness: With no additional charges required, it is one of the most economical ways to transfer funds electronically.
- Convenience: Transfers can be initiated from anywhere through digital banking channels, eliminating the need to visit a bank branch for every transaction.
- Enhanced Security: Electronic transfers minimize the risks associated with handling physical cash or cheques. The system is regulated by the central bank, ensuring robust security protocols.
- Time-Saving: While not instant, the transfer within 48 hours is significantly faster and more reliable than traditional paper-based methods like cheques.
- Wider Reach: It connects almost all commercial banks in Bangladesh, allowing for seamless transfers across different financial institutions.
- Record-Keeping: Electronic transactions provide clear audit trails, simplifying reconciliation for businesses and personal budgeting for individuals.
Initiating a BEFTN Transfer: A Step-by-Step Guide
To send money via BEFTN, you will typically need:
- Beneficiary's Bank Account Number: The full account number of the person or entity you are paying.
- Beneficiary's Bank Name: The name of the bank where the recipient holds their account.
- Beneficiary's Branch Name (and Routing Number, if required): Specific details of the recipient's bank branch. The routing number uniquely identifies the bank and branch.
- Beneficiary's Name: The exact name of the account holder.
- Amount to be Transferred: The sum you wish to send.
Once you have these details, you can:
- Use Online Banking: Log in to your bank's internet banking portal or mobile app, navigate to the funds transfer section, select BEFTN (sometimes labeled as "Other Bank Transfer" or "EFT"), and input the required details.
- Visit Your Bank Branch: Fill out a BEFTN transfer form and submit it to a bank teller.
BEFTN vs. Other Payment Methods
It's helpful to understand how BEFTN compares to other common electronic fund transfer systems in Bangladesh:
| Feature | BEFTN (Bangladesh Electronic Funds Transfer Network) | RTGS (Real-Time Gross Settlement) | Cheque |
|---|---|---|---|
| Speed | Up to 48 hours | Real-time / Immediate | Several days for clearing |
| Cost | No additional charges (typically) | Usually higher fees, especially for smaller amounts | May involve fees for cheque books, stop payments |
| Transaction Size | Suitable for all transaction sizes, often used for smaller to medium amounts | Primarily for high-value and urgent transactions (e.g., above BDT 1 lakh) | No specific limit, but subject to bank policies |
| Settlement | Net settlement (transactions batched and settled periodically) | Gross settlement (each transaction settled individually in real-time) | Manual clearing process |
| Use Cases | Payroll, bill payments, small-to-medium interbank transfers, recurring payments | Large corporate payments, interbank lending, urgent transfers | General payments, often for physical records |
For more detailed information on electronic fund transfers in Bangladesh, you can refer to resources from Bangladesh Bank or your respective commercial bank.
