National Financial Switch
Also called: NFS · Topic: Payment Systems and Digital Finance · NCERT: Class 12, Ch 3 "Money and Banking"
Meaning
The National Financial Switch (NFS) is a network that connects the ATMs of different banks. Because of it, a customer of one bank can withdraw cash or check the balance at another bank's ATM. It is run by the National Payments Corporation of India (NPCI), which took it over from IDRBT in 2009. NFS makes every ATM useful to every bank customer, which widens access to cash. Class 12 NCERT lists NFS among India's financial-inclusion initiatives, meaning steps that bring banking to more people.
Example
A farmer holds an account with a cooperative bank that has no ATM in his village. He can still withdraw cash from a public sector bank's ATM nearby, because the two banks are connected through NFS.
Don't confuse with
- NEFT (National Electronic Funds Transfer): NEFT is an RBI system for moving money between bank accounts. NFS is NPCI's network that links the ATMs of different banks.
Related concepts
- Automated Teller Machine
- Personal Identification Number
- Debit card
- Credit card
- Plastic money
- Point of Sale
- Card tokenisation