What is Digital Signature in Cryptography?

The public-key primitives used in message authentication are digital signatures. In written or
typed texts, handwritten signatures are frequently used in the physical world. They serve to bind
the message’s signatories.
A similar method that ties a person or entity to digital data is a digital signature. The receiver and
any other party may independently verify this binding. Data and a secret key, known only to the
signer, are used to calculate the digital signature, which is a cryptographic value.
In the actual world, the recipient of a message needs confirmation that it originates from the
sender and shouldn’t be able to deny its legitimacy. This condition is absolutely essential for
business applications because there is a significant probability of a dispute arising from the
sharing of data.

Model of Digital Signature

As already explained, public key cryptography serves as the foundation for the digital signature
system. The following illustration shows a sample digital signature scheme:

The  complete procedure is thoroughly explained in the following points:

 Each user of this scheme has a set of public and private keys.
 The key pairs used for decryption as well as encryption and signing/verification are often
distinct from one another. The public key is referred to as the verification key, and the
private key is referred to as the signature key.
 Data is fed into the hash function by the signer, which produces the hash.
 The signature algorithm then generates the digital signature on the supplied hash using
the hash value and signature key. The data is given a signature, and both are
subsequently sent to the verifier.
 The verification algorithm is fed by the verifier together with the digital signature and
verification key. The outcome of the verification algorithm is something useful.
 On the data it receives, the verifier likewise uses the same hash algorithm to produce a
hash value.
 This hash value and the results of the verification process are compared for verification.
The verifier determines if the digital signature is valid based on the results of the
comparison.
 No one else can use the signer’s “private” key to establish a digital signature; hence, the
signer cannot later retract their signature of the data.
It should be noted that typically a hash of the data is constructed rather than signing the data
directly by the signing method. It is enough to sign the hash instead of the original data because
the hash represents a distinctive representation of the original data. The effectiveness of the
system is the main justification for using the hash instead of data for signing directly.
Let’s assume that the signing algorithm is RSA. Modular exponentiation is used in the RSA
encryption/signing process, as was covered in the chapter on public key encryption.
Modular exponentiation is a computationally expensive and time-consuming method for signing
huge amounts of data. Since the hash is a relatively brief digest of the original material, signing a
hash is more effective than signing the original data as a whole.

Importance of Digital Signature

Public key cryptography-based digital signatures are regarded as one of the most crucial and
practical tools for achieving information security out of all the cryptographic primitives.
The digital signature also offers data integrity and message authentication in addition to non-
repudiation of the message. Let’s take a quick look at how the digital signature does this:
Message Authentication: When a sender’s public key is used to authenticate a digital signature,
the verifier is confident that the signature has only been created by that sender and no one else.
Data Integrity: The digital signature verification at the receiving end is ineffective if an attacker
gains access to the data and alters it. The output of the verification procedure will not match the
hash of the updated data. Therefore, presuming that data integrity has been compromised, the
receiver can safely reject the message.
Non-Repudiation: The signer can only produce a unique signature on the given data because it
is presumed that only the signee knows the signature key. As a result, if a dispute ever occurs,
the receiver can show data as well as the digital signature to the third party as proof.
We can develop a cryptosystem that would provide the four fundamental components of security
– privacy, authenticity, integrity, and non-repudiation – by incorporating public-key encryption into
digital signature schemes.

Encryption with Digital Signature

To achieve confidentiality in many digital conversations, it is preferable to exchange encrypted
messages rather than plaintext. A public (encryption) key of the sender is made available in the
public domain in a public key encryption method, allowing anyone to spoof the sender’s identity
or send an encrypted message to the recipient.
Due to this, users who utilise PKC for encryption should look for digital signatures in addition to
encrypted data in order to ensure message authenticity and non-repudiation.
By combining a digital signature and encryption technique, this can be archived. Let’s quickly go
over how to fulfil this condition. There are two options: sign first, then encrypt, and vice versa.
However, the sign-then-encrypt crypto technique can be used by the recipient to forge the
sender’s identity and deliver the data to a third party. Therefore, this approach is not
recommended. Encrypt-then-sign is a more dependable and widely used approach. The example
that follows shows this:
What is the full form of NEFT?
The full form of NEFT is the National Electronic Fund Transfer. Banking has become an
essential part of our daily lives. Since it became online, many of our activities have been easy to
manage. You don’t have to go to the bank and wait in long lines for a money transfer like before.
You no longer have to fill up cheques, withdrawal forms, and chaplains. NEFT is one of the
online money transfer methods currently in use.
NEFT is a centralised nationwide payment method owned and controlled by the Reserve Bank of
India ( RBI). It easily transfers money between banks across India. A bank branch should be
NEFT enabled to permit a customer to transfer the funds to another party.
Some of the points to be considered while transferring money through NEFT are.

 NEFT transaction timing on weekdays from 8.00 am to 6.30 pm and Saturdays from 8.00
am to 12.00 pm.
 There is no transaction limit, but Rs.50,000 is per transaction limit.

National Electronic Fund Transfer Process

When an individual wishes to transfer money from his bank account to another person’s bank
account, he may do so through the NEFT process rather than withdrawing the money and then
paying it in cash or issuing a cheque. NEFT has the primary benefit that it can transfer funds
from any branch account to any other bank account at any given venue. The only condition is
that both the sender and the recipient branches are NEFT-enabled. On the RBI website, you can
check the list of NEFT-enabled bank branches, or call your bank’s customer service to confirm
the same. The NEFT process allows for the cross-border, one-way movement of funds from India
to Nepal under the Indo-Nepal Remittance Facility Scheme.

Steps To Follow To Transfer Money Through NEFT

The Bank IFSC Code, along with other information such as the account holder’s name, bank
account number, bank branch and additional information, is a must for an NEFT transfer.

 Step 1-Use your user ID and password to sign in to your online banking account.
 Step 2-Go to the NEFT Fund Transfer page.
 Step 3- Enter the recipient name, bank account number and IFSC code.
 Step 4-You should initiate an NEFT transfer once the beneficiary is successfully
connected. Enter the amount to be transferred and click the send button.

Advantages of NEFT System

 There is no need for the physical presence of any party to perform a transaction.
 No bank visit is required as long as an individual keeps a valid bank account.
 NEFT is efficient and straightforward. It can be done in less than a minute, and hardly
involves any significant formality.
 Confirmation of a successful transaction can be viewed easily via email notifications and
text messages.

Difference Between NEFT And RTGS

RTGS refers to Real-Time Gross Settlement. Under this scheme, the beneficiary bank provides
direct instructions for the transfer. The payment is gross, so each transaction is performed
individually. These payments are final, and can not be withdrawn.
 The main difference between NEFT and RTGS is that, unlike RTGS, the movement of funds
occurs in batches. Hourly intervals are fixed for this reason, and the settlement is assigned to
one such time slot.

What is NEFT in Banking Terms

NEFT is an electronic money transfer system that was introduced by the RBI
(Reserve Bank of India). The NEFT full form in banking jargon is ‘National
Electronic Funds Transfer.’ It is one of the most secure and fastest mediums used
by individuals to transfer money. With this medium, you can send money within
just a few minutes. There is no time limitation to using this mode to send cash as
it is available 24*7 and 365 days. National Electronic Funds Transfer (NEFT) is an
acronym for National Electronic Funds Transfer. The Reserve Bank of India created and
manages the NEFT electronic funds transfer system, which was launched in November 2005.
NEFT allows you to transfer money from one NEFT-enabled bank account to another via the
internet.
The Reserve Bank of India owns and operates the National Electronic Funds Transfer
(NEFT) system, which is a statewide centralised payment system (RBI).

What Details are Required for NEFT

In order to transfer money through NEFT banking, you must first add the person
or organisation to whom you want to send money as a beneficiary. 
Following are the details required for NEFT:
 Name of the account holder to whom you want to send funds
 Account number
 Bank name
 Branch name
 Branch IFSC code
 Amount details
After adding a beneficiary, you are required to wait for a few minutes/hours to get
it activated by the bank. Once it gets activated, you can perform transactions. 

How NEFT Works

NEFT is used for sending cash quickly. The approach follows a step-by-step
guide to complete a transaction. Here are the details about the same. 
 The first step is adding a beneficiary. 
 Once a beneficiary is added, the bank takes a few minutes/hours to activate it. 
 After activation, you may send funds.
 After you execute an NEFT transaction, your bank generates a message and transmits it to
its NEFT service centre.
 The message is then transferred from the NEFT service centre to the RBI-operated NEFT
clearance centre.
 The clearance centre then arranges payment processing requests by the recipient bank and
creates a financial entry to deduct money from the sender and credit them to the
recipient's account.
 Following that, a payment message is issued to the recipient banks via their NEFT service
centre.
 Lastly, the recipient bank receives the clearance centre's inbound transfer notifications
and credit amount into the beneficiary's accounts.

How to Pay Credit Card Bill Using NEFT

Here are the steps to follow to pay credit card bills using NEFT.
 Log in to your net banking account with your credentials.
 You will see a tab of ‘Add Payee’ on the main page. Click on that.
 Now, enter your credit card details such as the name on the card, bank name, account
number, IFSC code, and so on. 
 Once all of the information has been filled in, click the 'Submit' button.
 Go to the 'NEFT Funds Transfer' section once your credit card has been registered as a
'Payee.'
 Choose your credit card  as a payment method and input the total amount to be sent using
NEFT and click on ‘Submit.’
 Following that, you will receive an OTP on your phone. Enter that to complete the
transaction. 

Features and Benefits of NEFT 

Here is the list of multiple advantages of NEFT.
 It is one of the fastest and most secure methods to transfer money.
 It allows to send money from one account to another within the same bank, as well as
between accounts from other banks. 
 You can use this method 24*7 and 365 days.
 The amount will be deposited into the beneficiary’s account within just a few minutes.
 You can do a transaction just by logging into your net banking account. As a result, your
time and effort will be saved. 
 It is a paperless facility.

DIFFERENT TYPES OF MONEY TRANSFER

1. NEFT (National Electronic Fund Transfer)
The National Electronic Fund Transfer or NEFT is the simplest and most liked form of
money transfer from one bank to bank.
To make any NEFT transaction, you just need two important pieces of information -- firstly,
account number and secondly, the IFSC Code of the destination account.
In NEFT, there is no cap on the amount of money that can be transferred. However,
individual banks may set a limit.
Steps for a NEFT money transfer
Step 1: Go to Fund Transfer tab, and select 'Transfer to other bank' (NEFT)
Step 2: Select the recipient account and enter the relevant details
Step 3: Accept the (Terms and Conditions)
Step 4: Recheck the details, if all and complete the process
2. RTGS (Real Time Gross Settlement
A Real Time Gross Settlement or RTGS is almost similar to NEFT but the minimum
payment and how it credits to the destination account differs.
If you want to transfer more than 2 then you can use this. There is no upper cap on the
amount.
An RTGS money transfer happens on a real-time basis. The bank of the person to whom the
money is transferred gets 30 minutes to credit it to his/her account.
Steps to make RTGS funds transfer:
Step 1: Go to Fund Transfer tab, and select 'Transfer to other bank' (RTGS)
Step 2: Select the recipient account and enter the relevant details
Step 3: Accept the (Terms and Conditions)
Step 4: Recheck the details, if all are correct, then confirm and complete the process
3. IMPS (Immediate Payment Service)
Immediate Payment Service or IMPs an instant fund transfer service and it can be used
anytime. IMPS can be simply defined as NEFT+RTGS.
In order to avoid fraud complaints, the cap on transaction limit is set very low. For IMPS
transfer, you just need to know the destination account holder's IMPS id (MMID) and his/her
mobile number.
Steps to make IMPS money transfer:
Step 1:Using your Customer ID and Password into Net Banking/Mobile Banking
Step 2: Go to Funds Transfer tab (Other Bank Account)
Step 3: Select Debit / Credit Account, mode of transfer as IMPS and beneficiary account
Step 4: Enter the amount to be transferred and click on Submit
Step 5: Click on the confirm button
Step 6: Recheck all the information and approve the transaction using OTP (one time
password) received on your registered mobile number
Step 7: And at last, confirm by clicking on the submit button.
Through IMPS, you can transfer money 24/7, But RTGS & NEFT can be done only in
working hours on weekdays + a few hours on Saturdays only. Other than NEFT, RTGS and
IMPS, you can also transfer your money through UPI and cheque.
1. UPI (Unified Payments Interface):
A Unified Payments Interface is a real-time payment system that allows transactions to be
done through any smartphone using VPA (Virtual Payment Address).
No bank account detail is needed for the money transfer through UPI. Only mobile number or
name is sufficient and the transactions can be done 24/7. UPI-enabled apps allow the
transfers up to Rs 1 lakh.
2. Cheque:
You can transfer money from your one account to another account by cheque. You have to
simply draw a stating payee as your name along with the account number wherein you want
to transfer the amount along with your signature.
It's done immediately at a branch if the transfer is within your bank.
There is no limit if you want to transfer money from your a/c to another bank a/c, but if you
want to withdraw a certain amount, there are restrictions.
Through a cheque, you cannot withdraw more than Rs 50,000 from a non-home branch.