TRF Full Form

TRF in banking stands for Transfer which is a transfer of funds from one branch to another branch, and it is generally done manually by the banker. In this case, the bank takes a lot of time and the money also takes a lot of time to reach.

In recent times, this process is done automatically by the banking software called TMS (Treasury Management System) which transfers funds instantly after sending a file from one branch to another. Now there is an electronic way for transfers in Banks.

TRF: Definition

TRF stands for Transfers between Bank Branches, and it is a process of movement of funds from one branch to another branch. These transfers are usually done manually by the bankers, and they do it according to instructions given by central banks or monetary authorities. These transfers are usually referred to as manual TRF (MTR).

Importance of Transfers

TRF is important because it helps in reducing the number of bank branches in a particular country. It also helps in keeping the branches cost down.

TRF in India

In India, the transfer is done on a batch basis. It is done once in a week and funds for transfer are collected from branch counters after conducting transactions at the branch. For example, if funds have to be transferred from one branch to another, then first funds for this purpose are collected by the bank after conducting transactions at that particular branch. Then these funds are transferred to other branches, and finally it reaches the final destination branch where it is credited to a specific account.

The movement of funds from source branch to destination branch and vice versa is known as transfers between banks and in case of manual TRF (MTR) these transfers may take a few days, and they may get delayed too.

Goals of Banking

The main goals of conducting transactions within and between the branches are to increase customer service quality, reduce costs, and improve accuracy, timeliness and reliability. The transfer procedures are done by banks according to guidelines provided by the central bank or other monetary authority. The instructions given by the bank for conducting transfers include instructions for sending money, names of beneficiary account holders or the destination branch account number along with the money transfer information.

Types of Transfers

There are two types of TRFs– M-T-R (Manual Transfer) and D-T-R (Direct Transfer).  It depends upon whether the branches wish to transfer funds for other branches or transfer funds from their own branch.

MTR

In manual transactions, the transfer is made from one branch to another branch or from one account to another account in the same branch. Manual transactions are done manually by the banker. For example, if an employer wants to transfer some funds from his employer’s account to an employee’s account then a request will be given by an employee and the amount will be transferred manually by a banker according to instructions of the central bank or monetary authority.

DTR

The direct financial transfer is also known as RTGS (Real Time Gross Settlement) and it is done through a computer network (Faster). It is done for routine small value transactions for example salary payments etc.

Need for Transfers

TRF is not needed if it is done automatically but if most transactions are still manual then TRF will be needed first before crediting since the whole process needs human intervention. If all the transactions are already automated, then there will be no need for TRF. Some of the benefits of TRF are mentioned here:

Reduction of cost

It’s more economical to have a single branch office if no transfer is needed. In other words, it is more economical to have an office where only people are employed who can transfer funds at all through manual transactions in the branch.  This can be very costly otherwise. To keep the expenses at a minimum level, only the amount that may be required by the branch is transferred and not all in one go as it is done in manual transactions.  This reduces the cost of bank branches too.

Improved Accuracy

When banks transfer funds, they need to make sure they are moving the correct amount of money. In manual transactions, the money may not be transferred according to the actual requirements of the customer. So TRF is done in such a way that accuracy increases and custom activities also decrease.

Improved Time Taken

Nowadays, it takes around 3 working days for transferring funds from other banks to this particular bank. Transfer of fewer than 5000 rupees takes more than 10 working days (in manual transactions). This happened due to delay in communication between the branches which is resolved by transferring funds through TMS and no more delay in transfer occurs as M-T-R process.

Difference between TRF & IMPS

The transfer from one branch to another is done through an electronic medium called IMPS using mobile phones which works on IFSC Code. It is faster than the TRF transfers and the time is less than a minute. In IMPS, you have to enter your IFSC code of the destination bank and mobile number, hit submit, and it will immediately transfer the funds. In TRF, you have to manually give the Branch details at both ends for the transfer of funds such as Bank Name, Account Number, IFSC Code etc. It takes more time to do this process than IMPS. IMPS works only for interbank accounts whereas TRF can be used for both intra and interbank transactions Transfer from one branch of a bank to another would be done via TMS software while IMPS works through Mobile phones using IFSC code.

Conclusion

TRF is a way of transferring cash from one branch of the bank to another branch of the same bank. The transaction is done through IFSC Code which works using mobile phones, and it can be used for both interbank and intra-bank transfer. Both DTR and MTR transfers can be done but in this case it is used for intra-bank transfer only. There are many advantages of TRF over IMPS, but it requires manual intervention which delays the transfers. It is slightly more expensive when compared to IMPS, but the benefits are great because the time taken to transfer funds will be less than a minute.