‘RTGS’ or Real Time Gross Settlement is a system where there is continuous and real-time settlement of fund-transfers, individually on a transaction by transaction basis (without netting). ‘Real Time’ means the processing of instructions at the time they are received; ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs individually.
According to RBI’s latest vision document for payment and settlement systems, RTGS operating hours will be extended by one hour from Monday, 26th August 2019.
At present, the RTGS system is available for customer transactions from 8:00 am to 6:00 pm and for inter-bank transactions from 8:00 am to 7:45 pm. In order to increase the availability of the RTGS system, the Reserve Bank of India (RBI) has decided to extend the operating hours of RTGS and commence operations for customers and banks from 7:00 am.
The RTGS time window with effect from August 26, 2019 will, therefore, be as under:
|Open for Business||07:00 hours|
|Customer transactions (Initial Cut-off)||18:00 hours|
|Inter-bank transactions (Final Cut-off)||19:45 hours|
|IDL Reversal||19:45 hours - 20:00 hours|
|End of Day||20:00 hours|
The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is ₹2,00,000/- with no upper or maximum ceiling. For a funds transfer to go through RTGS, both the sending bank branch and the receiving bank branch need to be RTGS enabled. Under normal circumstances, the beneficiary branches are expected to receive the funds in real time as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary’s account within 30 minutes of receiving the funds transfer message.
The benefits of RTGS transfer over other modes of payments:
- It is a safe and secure system for funds transfer.
- RTGS transactions / transfers have no amount cap
- The system is available on all days when most bank branches are functioning, including Saturdays
- There is real time transfer of funds to the beneficiary account
- The remitter need not use a physical cheque or a demand draft
- The beneficiary need not visit a bank branch for depositing the paper instruments
- The beneficiary need not be apprehensive about loss / theft of physical instruments or the likelihood of fraudulent encashment thereof
- Remitter can initiate the remittances from his / her home / place of work using internet banking, if his / her bank offers such service
- The transaction charges have been capped by RBI
- The transaction has legal backing
If it is not possible to credit the funds to the beneficiary customer’s account for any reason, the funds received by the RTGS member bank will be returned to the originating bank within one hour of receipt of the payment at the Payment Interface (PI) or before the end of the RTGS business day, whichever is earlier. Once the money is received back by the remitting bank, the original debit entry in the customer’s account needs to be reversed.