In this article we will explore the NEFT (National Electronic Funds Transfer) return codes, providing insights into the factors contributing to unsuccessful NEFT transactions. NEFT, in conjunction with RTGS (Real Time Gross Settlement), remains one of the fastest and most streamlined means for facilitating the seamless transfer of funds between senders and recipients.
NEFT Return Codes Explained
NEFT return codes are instrumental in deciphering the causes of transaction failures in the NEFT system. They are vital for both financial institutions and individuals to understand why a particular transaction did not succeed. Let’s break down the NEFT return codes and their implications:
R 01: Insufficient Funds
R 01 NEFT return code denotes that the remitting customer lacks sufficient balance to complete the transaction. In such cases, the customer must deposit the required amount to proceed with the transaction.
Example : ABC attempted to transfer ₹50,000 to his friend’s account using NEFT, but his account balance was only ₹45,000. In this case, the NEFT transaction would be declined due to insufficient funds. ABC would need to deposit ₹5,000 to complete the transaction.
R 02: Account Closed
R 02 NEFT return code indicates that the recipient’s account has been closed, rendering the transaction infeasible. The recipient should provide an active account for the funds to be remitted.
Example : ABC initiated an NEFT transfer of ₹20,000 to her daughter’s bank account, not realizing that her daughter had recently closed that account. As a result, the NEFT transfer would fail, and ABC would be notified to provide an active account for the funds.
R 03: No Such Account
R 03 NEFT return code signifies that there is no matching account to remit the funds to. The recipient must provide a valid account number for the transaction to proceed.
Example : ABC intended to send ₹10,000 to his supplier, but he mistakenly entered the wrong account number. As a result, there was no matching account for the funds to be remitted, leading to a failed NEFT transaction. ABC would need to provide the correct account number to complete the transaction.
R 04: Invalid Account Number
R 04 NEFT return code highlights an incorrect or invalid account number provided by the sender, leading to a failed transaction.
Example : ABC attempted to send ₹15,000 to her landlord, but she mistakenly entered an account number that did not exist. This resulted in a failed NEFT transaction due to an invalid account number.
R 05: Unauthorized Debit Entry – Account Number Structure Not Valid
R 05 NEFT return code points to an unauthorized debit entry or an invalid account number structure.
Example : ABC tried to initiate an NEFT transaction, but the account number he provided had an incorrect structure and did not comply with the bank’s account numbering format. This resulted in an unauthorized debit entry, and the transaction failed.
R 06: Return as per ODFI’s Request
R 06 NEFT return codes indicate that the Originating Depository Financial Institution (ODFI) has requested the reversal of the transaction.
Example : In a business-to-business scenario, a company mistakenly initiated a duplicate NEFT transaction, and the Originating Depository Financial Institution (ODFI) requested a reversal of one of the transactions to rectify the error.
R 07: Authorization Revoked by Customer
R 07 NEFT return codes signal that the customer has requested the transaction’s reversal.
Example : ABC authorized an NEFT transaction but later changed his mind and revoked the authorization. This led to the reversal of the transaction as per the customer’s request.
R 08: Payment Stopped or Stop Payment on Item
R 08 NEFT return codes suggest that the customer has requested the transaction to be stopped.
Example : ABC had initiated an NEFT payment for an online purchase, decided to stop the payment after discovering a discrepancy in the item’s condition upon delivery. They contacted their bank to request a stop payment on the transaction.
R 09: Uncollected Funds
R 09 NEFT return codes reflect that the sender lacks sufficient funds to complete the transaction.
Example : A business owner ABC attempted to transfer a large sum of money through NEFT, but his account balance did not cover the amount. This resulted in uncollected funds, and the NEFT transaction could not proceed.
R 10: Advises Not Authorized
R 10 NEFT return codes encompass various authorization issues.
Example : A corporation wanted to make a payment to a vendor through NEFT, but the transaction did not comply with the terms of the authorization provided by the vendor, leading to an “Advises Not Authorized” code.
R 11: Customer Advises Entry Not in Accordance with the Terms of the Authorization Used by the RDFI
R 11 NEFT return codes imply that the entry does not align with the authorization used by the Receiving Depository Financial Institution (RDFI).
Example : ABC set up a recurring NEFT transfer to pay her monthly rent. However, her bank received a transaction that did not align with the terms of the authorization she had provided. As a result, her bank returned the transaction with an R 11 code.
R 12: NRI Account
R 12 NEFT return codes stipulate that foreign transactions are exclusively accepted through foreign exchange, not NEFT.
Example : ABC, a Non-Resident Indian (NRI), attempted to send money to his family’s account in India using NEFT. However, NEFT is not suitable for international transactions, and the transaction was returned with an R 12 code. ABC was advised to use a foreign exchange service for such transfers.
R 13: RDFI Not Qualified to Participate – Financial Institution
R 13 NEFT return codes indicate that the RDFI is not qualified to participate in ACH or the routing number is incorrect.
Example : A small credit union attempted to process an NEFT transaction, but it turned out that the credit union was not qualified to participate in the Automated Clearing House (ACH) system. The transaction was returned with an R 13 code due to the financial institution’s qualification issue.
R 14: Representative Payee Deceased
R 14 NEFT return codes signify that the representative payee is deceased.
Example : A government agency was making payments to a representative payee on behalf of a beneficiary. However, the payee passed away, and the agency received an R 14 code, indicating the need to update the payee information.
R 15: Beneficiary or Account Holder is Deceased
R 15 NEFT return codes communicate that the beneficiary or account holder has passed away.
Example : ABC wanted to transfer funds to his late uncle’s account, unaware of his uncle’s passing. The bank received the transaction but, upon realizing that the account holder was deceased, returned it with an R 15 code.
R 16: Account Frozen
R 16 NEFT return codes indicate that the account is frozen for various reasons, prohibiting any credit additions until the freeze is removed.
Example : A business account belonging to ABC Corporation was frozen due to an ongoing legal dispute. When a customer attempted to transfer money to this account via NEFT, the transaction was returned with an R 16 code. The customer was informed that the account was temporarily inaccessible due to the legal issue.
R 18: Improper Effective Entry Date
R 18 NEFT return codes highlight an improper effective entry date. The credit entry’s effective date exceeds two days beyond the banking day’s processing.
Example : ABC scheduled an NEFT transaction with an effective entry date that exceeded two days after the scheduled banking day. The transaction was returned with an R 18 code as the entry date was beyond the permissible timeframe.
R 20: Non-Transaction Account
R 20 NEFT return codes clarify that the account is not designed for transactional purposes.
Example : ABC attempted to use NEFT to transfer funds from a fixed deposit account, which was designated as a non-transaction account. As per the bank’s policies, non-transaction accounts cannot be used for such transactions, resulting in an R 20 code.
R 21: Invalid Company Identification
R 21 NEFT return codes suggest that the company identification number is invalid.
Example : A business entity attempted to transfer funds using NEFT, but the provided company identification number was invalid or not recognized by the bank’s system. The transaction was returned with an R 21 code.
R 22: Invalid Individual ID Number
R 22 NEFT return codes convey that the individual ID number is invalid.
Example : ABC attempted to send money to a friend, but he incorrectly entered his friend’s individual ID number, resulting in an R 22 code due to the invalid ID number.
R 23: Credit Entry Refused by Receiver
R 23 NEFT return codes indicate that the receiver has declined the credit entry for various reasons, such as legal issues, incorrect amounts, or lack of permission.
Example : ABC initiated an NEFT transfer to pay for an online purchase. However, the receiver, an online merchant, refused the credit entry because the payment received was less than the amount requested. The merchant requested the exact amount to complete the transaction, leading to an R 23 code.
R 24: Duplicate Entry
R 24 NEFT return codes imply that the transaction matches another in terms of trace number, date, amount, and other data.
Example : A business accountant accidentally submitted the same NEFT transaction twice for an employee’s salary payment. Both transactions contained identical details, such as the trace number, date, and amount. The receiving bank detected the duplication and returned one of the transactions with an R 24 code.
R 29: Corporate Customer Advises Not Authorized
R 29 NEFT return codes signify that the corporate customer advises that the transaction is not authorized.
Example : A corporation attempted to transfer funds to a vendor through NEFT, but the vendor disputed the transaction and claimed that it was not authorized. This led to an R 29 code as the corporate customer and vendor could not reconcile the payment.
R 31: Permissible Return Entry
R 31 NEFT return codes reference permissible return entries.
Example : A bank received an NEFT transaction that complied with all rules and regulations, but the customer wanted to reverse it for personal reasons. The bank processed a permissible return entry, resulting in an R 31 code, as the customer was within their rights to return the transaction.
R 33: Return of XCK Entry
R 33 NEFT return codes indicate the return of an excessive (XCK) entry.
Example : An individual attempted to transfer funds through NEFT, but the receiving bank detected a discrepancy, suspecting an excessive or incorrect entry (XCK). The receiving bank returned the transaction with an R 33 code, requesting clarification on the entry.
NEFT return codes serve as invaluable tools for pinpointing the causes of failed transactions, enabling corrective actions to be taken swiftly. Understanding these codes is crucial for a seamless NEFT transaction experience and above explained examples for each of the NEFT return codes, allowing a comprehensive understanding of the reasons behind failed NEFT transactions and how these codes are applied in real-world scenarios.