Ans :
EFT is the computer based system that transfers the money electronically from one
account to another. Sometimes, it is also known as e-cheque. Interbank transfers are
examples of EFT.
Advantages
• Scheduled electronic payment helps in managing delayed disbursements
easily,
• The manual cheque involves the cost of ordering cheques, stamps,
envelopes, visit to bank, etc. But, EFT reduces all such administrative costs.
It requires less labor and simplifies reconciliation of bills,
• Money transfer is faster as transfer is normally done within 24 hours,
• It provides greater control to approve payment by using built in feature of
segregation of duties. Only a password is required to issue payments, and
• Process is secure when compared to cheques as no issue of lost or stolen
cheques arises.
Disadvantages
• It is limited to large companies;
• Risk is involved as the account number added may be incorrect sometimes,
and
• The transactions are irreversible.
