What Is Real-Time Gross Settlement (RTGS)
‘RTGS’ or Real Time Gross Settlement is a fund transfer method through which money is sent in ‘real time’ basis without any delays. This electronic fund transfer system allows the money sent by the remitter to immediately reach the payee/beneficiary as and when the money transfer transaction is initiated. Here, ‘Gross Settlement’ refers to the processing of transactions on an individual basis and not in a batch wise system. RTGS is typically meant for larger value transactions and the minimum amount that can be sent via this mode is Rs.2 lakh.
- RTGS Fund Transfer Process(Stepwise)
- Features of RTGS Transaction
- Fees and Charges for RTGS Transactions
- What are the Timings for RTGS?
- Difference between RTGS and NEFT
- NEFT v/s RTGS v/s IMPS
- Why Real-Time Gross Settlement (RTGS) is Important?
- Tips and Tricks to Gain Maximum Benefits Through RTGS
- Benefits of Real-Time Gross Settlement (RTGS)
- RTGS is Available 24x7x365 from December 2020
- FAQ's for RTGS (Real Time Gross Settlement)
Money can be sent using RTGS through net banking. To initiate such a transaction, it is important to collect some details from the payee such as account number, bank name, IFSC code, and account holder name. Another interesting feature about this wire transfer method is that transactions can be scheduled in advance.
The following information is required for an RTGS transaction:
- The amount thats needs to be transferred in rupees
- Name of the payee/beneficiary as in the bank account
- IFSC code of the payee/beneficiary
- Account number of the payee/beneficiary
- Name of beneficiary bank and bank branch
The RTGS payment system is maintained by the Reserve Bank of India (RBI) and hence is a safe and reliable method of sending and receiving money at any given point of time in the country. In fact, RTGS is one among the fastest ways to send money to anyone. It is much faster than the NEFT method of payment. All RTGS charges are very reasonable and range anywhere between Rs.25 to Rs.55.
RTGS Fund Transfer Process(Stepwise)The Below are the Steps for Process through Online:
Step 1: Log in to your respective bank’s internet banking account by entering your username and password
Step 2: Go to the home page and click on the Funds Transfer option
Step 3: Proceed to choose RTGS, key in beneficiary/payee details such as account number, IFSC code, etc
Step 4: Review all details and then submit. The funds will be credited immediately to the payee account
Check IFSC Code for Top Banks:
|State Bank of India IFSC Code||HDFC Bank IFSC Code||Indian Bank IFSC Code|
|Axis bank IFSC Code||Canara bank IFSC Code||ICICI Bank IFSC Code|
Features of RTGS Transaction
Here are the main features of an RTGS transaction that one should be aware of before using it:
- Realtime online fund transfer
- Used for high value transactions
- Safe and secure
- Reliable and backed by RBI
- Immediate clearing
- Funds credited on a one-on-one basis
- Transactions executed on an individual and gross basis
Fees and Charges for RTGS Transactions
The recipient bank does not charge anything to the recipient account for an RTGS transaction.
For the sender, the bank charges the following based on the amount being transferred as follows:
|Amount||RTGS Fee||Time Varying Charge per Outward Transaction|
|Rs.2 lakh to Rs.5 lakh||Rs.30 per transaction||7:00 a.m. - 11:00 a.m. - Nil 11:00 a.m. - 1:00 p.m. - Rs.2 1:00 p.m. - 6:00 p.m. - Rs.5 Post 6:00 p.m. - Rs.10|
|Above Rs.5 lakh||Rs.55 per transaction|
What are the Timings for RTGS?
|Working Days||At Present from 7.00 a.m. to 6.00 p.m.|
|Saturdays||At Present from 9.00 a.m. to 2.00 p.m.|
Difference between RTGS and NEFT
|Settlements||Transactions settled in batches||Transactions settled individually|
|RTGS Timings||Settled on an hourly basis during bank working hours||Processed immediately in real-time|
|Transaction Amount||No minimum limit but has a maximum limit||Minimum limit is Rs.2 lakh. No upper ceiling|
|Value||Meant for lower or medium range transactions||Meant for higher value transactions|
NEFT is a type of electronic fund transfer method where settlements are made on a Deferred Net Settlement (DNS) basis. This basically means that when it comes to NEFT transactions, settlement does not take place unless a certain number of transactions are received till a certain cut-off time. On the other hand, RTGS transactions are processed as and when they are received.
For instance in NEFT, if you initiate a fund transfer after a settlement time, you have to wait for the next settlement time for the transaction to be processed.
NEFT v/s RTGS v/s IMPS
In India, there are three types of fund transfer methods NEFT, RTGS and Immediate Payments Service (IMPS). All these three methods inherently let you transfer money from one account to another but each method is slightly different from the other.
While NEFT and RTGS are regulated and managed by the RBI, the IMPS system is the brainchild of the National Payments Corporation of India (NPCI).
NEFT is mainly for lower value transactions and funds transfers are not settled immediately. NEFT services are also not available on bank holidays and Sundays. There are 11 batches on weekdays and 6 batches on Sundays. There is no minimum amount but there is a is ceiling cap on the maximum limit in NEFT.
RTGS transactions, on the other hand, are settled on a real-time basis and there is a minimum limit but no maximum limit. Banks have the liberty to decide their own upper limit as the RBI has not set any ceiling cap for RTGS transactions.
IMPS services are available on a 24/7 basis at anytime of the day or night. When it comes to NEFT and RTGS, fund transfers cannot be initiated on bank holidays or Sundays, this is not the case with IMPS. All IMPS transfers can be made on all 365 days in a year at anytime and from anywhere.
Why Real-Time Gross Settlement (RTGS) is Important?
Real-time gross settlement is used by the Central Bank of India to help in minimising the risk that is involved in all transactions that are of high-value. In spite of financial institutions and banks having very high security processes in place for protecting its customer’s information threats will always be there.
This is why the real-time gross settlement process has offered a lot of security to the customers for making secure transactions by clearing all their settlements immediately.
Tips and Tricks to Gain Maximum Benefits Through RTGS
You will be charged for RTGS transactions. However, the charges on these transactions are nominal.
The Reserve Bank of India (RBI) has now set a cap on the transaction charge at Rs.49.50 for all amounts that cross Rs.5,00,000 and Rs.24.50 for funds ranging between Rs.2,00,000 and Rs.5,00,000.
You need to submit a filled form which has information regarding the account from which your funds need to be debited, and the account to which the amount has to be credited.
Benefits of Real-Time Gross Settlement (RTGS)
- RTGS systems are now being used by central banks all across the world. The system helps to minimise the risk of any high-value payment settlements among financial institutions.
- Even though many financial institutions and companies which deal with a lot of sensitive financial data have high levels of security established in their systems for protecting funds and information, the nature and also the range of online threats seem to be evolving pretty fast.
- An example of cybersecurity threat to any financial data are social engineering or phishing. This means tricking people into revealing personal and financial information, thereby enabling data theft.
RTGS is Available 24x7x365 from December 2020
- The Reserve Bank of India (RBI) had recently in the Statement on Development and Regulatory Policies made an announcement that RTGS would be available for 24 hours a day, 7 days a week from December 2020. The previous rules had said that the transfers can be made only between 7:00 a.m. and 6:00 p.m. on all working days (except for the second and fourth Saturday of the month and on Sundays).
- The This announcement has come after the RBI had made the NEFT facility available 24X7 from 2019.
- In the statement the central bank had said that in December 2019, the National Electronic Funds Transfer (NEFT) system had been made available on a 24x7x365 basis. The system has also been operating pretty smoothly ever since. Large-value RTGS system is available for customers from 7:00 a.m. to 6:00 p.m. on all working days of a week (except 2nd and 4th Saturdays of the month).
FAQ's for RTGS (Real Time Gross Settlement)
What is the difference between RTGS and NEFT?
Ans: NEFT or National Electronic Fund Transfer transactions are settled in batches, while RTGS transactions are settled individually.
What is the minimum and maximum limit for RTGS transactions?
Ans: Remember that all RTGS transactions are mainly for larger value transactions. The minimum amount for RTGS transactions is Rs.2 lakh. There is no maximum limit.
How long does it take for funds to get credited under RTGS?
Ans: Generally, the funds are credited instantly. The bank will ideally credit the money within a 30 minute time frame.
Will the sender/remitter receive any confirmation message or acknowledgement once the money is credited to the beneficiary/payee account?
Ans: A confirmation SMS will ideally be sent to the remitter.
In case funds are not credited to the payee/beneficiary account due to an error, will the remitter get back the money?
Ans: Yes. In such a case, the funds will be automatically credited to the remitter’s account. If this does not happen within a 24-hour time window, then contact your bank’s customer care representative.
Do all banks in India have RTGS facility?
Ans: No. RTGS services can be availed only at RTGS-enabled banks.
What is inter bank fund transfer?
Ans: When funds are transferred from one bank account to another bank account. Basically, it is sending money to other bank accounts.
Is it possible to schedule an RTGS transaction in advance?
How much in advance can I schedule an RTGS transaction?
Ans: It can be scheduled in advance of 3 working days.
Can I use RTGS to send money to foreign banks?
Ans: No. The service is only available in India with RTGS-enabled banks.
How do I know if my bank is RTGS-enabled?
Ans: To know if your bank has RTGS facility or not, visit the RBI website to get access to a comprehensive list of all banks that are RTGS-enabled.
Can RTGS transfers be made on bank holidays and Sundays?
Ans: No. Unfortunately the service is only available on working days during the working hours of the bank.
Other IFSC Related Article
|NEFT Timing||Digital Wallet||Mobile Wallet|
|SBI UPI||Bank IFSC Code|
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