National Electronic Fund Transfer(NEFT) is a system that enables money transfer between bank accounts in various bank branches. NEFT is extensively utilised for transactions below 10 Lakhs. The quantum and frequency of NEFT transfers is a measure of the confidence that clients repose on the system.
That said cancellation is a challenge with NEFT, but it is not impossible to reverse an erroneous transfer. Banks like ICICI take pains to facilitate such reversals should it be warranted.
For reversing a NEFT transfer three things need to be done: -
#The home branch needs to be informed of the lapse.
#The remote branch and account holder need to be identified and
they also be intimated of the erroneous transfer.
#Obtaining the consent of the remote client for reversal.
The key issue here is obtaining consent of the remote client. If he is obliging, then the transfer should be reversed through bank transactions so that it does not reflect as income for tax purposes. Should such consent not be forthcoming then legal recourse is the option.
These are cases of unjust enrichment which may be covered under Section 415 of IPC as cheating or Quantum Meruit, which crudely translates to “to him, that he deserves”. But Quantum Meruit is a contract violation provision which therefore begs the question “Is NEFT at all a contract?”, more so when the second party is not even aware of his participation. But such heady issues are best left to the Courts to deal.
But I carry pleasant memories of my experience with NEFT cancellation at ICICI Bank. I met the local Branch manager, which was not my home branch, and explained my case. Luckily for me the remote bank was also ICICI.
The manager immediately called his counterpart and then we waited. Soon he got a call and I was given the number of the remote client. I spoke to him and made my request. A true gentleman he willingly obliged. It only remained for me to thank him profusely as also the local branch manager, equally profusely.
The manager also assured me that NEFT cancellations are very rare, less than 1% and failure to complete initiated cancellations even rarer. I spent less than an hour at the branch and when I got back home and checked the account the reversal had been completed. I was very lucky. The lesson is that with a positive attitude, lots of luck and not to forget a friendly ICICI Bank manager, erroneous NEFT transfers can be cancelled.