What is electronic funds transfer ? How are cheques cleared in this type of transfer?

Electronic Funds Transfer (EFT) :

                                                                                  EFT is a computer based system that facilities the transfer of money or processing financial transactions between two  financial institutions the same day or overnight.Interbank, transfer is one of the earliest forms of electronic payment systems on private networks.

EFT is the transfer of credit between banks where payments flow electronically from the payment bank to the payee's bank. EFT is one of the earliest examples of online payment systems in banking.Although funds transfer account for small portion of the total non-cash payments. 

EFT is used when a high priority is placed on timelines and certainty of payment.

There are two clearing system for EFT transactions :

1. The National EFT clearing systems is operated by IRECC Ltd and is used to clear EFT transaction.  

2.Step-2 is a europe wide clearing system for euro-denominated tansactions.