RTGS - Real Time Gross Settlement

'RTGS' stands for Real Time Gross Settlement, which is transfer of funds on an order by order basis (without netting). 'Real Time' means the processing of instructions at the time they are received rather than at some later time; 'Gross Settlement' means the settlement of funds transfer instructions occurs individually.

Q1. Is there any minimum / maximum amount stipulation for RTGS transactions?

Ans. The minimum amount to be transferred through RTGS is ` 2 lakh. There is no upper ceiling for RTGS transactions.

Q2. What is the time taken for effecting funds transfer from one account to another under RTGS?

Ans. The beneficiary branches are expected to receive the funds as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary's account within two hours of receiving the funds transfer message.

Q3. Would the remitting customer get back the money if it is not credited to the beneficiary's account? When?

Ans. Yes. Funds, received by a RTGS member for the credit to a beneficiary customer’s account, will be returned to the originating RTGS member within two hours of the receipt of the payment at the PI of the recipient bank or before the end of the RTGS Business day, whichever is earlier, if it is not possible to credit the funds to the beneficiary customer’s account for any reason e.g. account does not exist, account frozen, etc. Once the money is received back by the remitting bank, the original debit entry in the customer's account is reversed.

Q4. Till what time RTGS service is available?

Ans. The RTGS service is available to banks from 9.00 hours to 16.30 hours from Monday to Friday and from 9.00 hours to 14:00 hours on Saturday.

Q5. What are the Charges for RTGS transactions?

Ans ` 2 lakh to ` 5 lakh - not exceeding ` 30 per transaction;
Above ` 5 lakh – not exceeding ` 55 per transaction.

Difference between RTGS and NEFT

Ans. NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes place with all transactions received till the particular cut-off time. These transactions are netted (payable and receivables) in NEFT whereas in RTGS the transactions are settled individually.

For example, currently, NEFT operates in hourly batches. [There are twelve settlements from 8 am to 7 pm on week days and six settlements from 8 am to 1 pm on Saturdays.] Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time Contrary to this, in the RTGS transactions are processed continuously throughout the RTGS business hours.