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  • RTGS - Real Time Gross Settlement


    RTGS stands for Real-time Gross Settlement System, which is one of the most popular electronic fund transfer methods in India. RTGS is defined as the ‘real-time’ method of fund transfer on an individual basis. ‘Real Time’ refers to the process of immediate fund transfer and ‘Gross Settlement’ means the settlement of funds in full and on a one-on-one basis. You can use RTGS to send funds from one bank account to another bank account. RTGS payments are processed through the Reserve Bank of India (RBI) books, and thus all transactions are irrevocable and final. The main advantage of RTGS over other fund transfer methods is that it eliminates the settlement risk for all interbank transfers.

    Unlike, other fund transfer systems, RTGS allows you to make money transfers in large amounts, in India, as long as they are over Rs.2 lakh. RTGS allows people to transfer money if their bank has an IFSC code which is assigned to each bank branch under the NEFT and RTGS system by the RBI. Unlike NEFT, where transactions take place in hourly batches, RTGS transactions take place individually.

    The RTGS system is operated by the RBI and the main aim is to reduce the risk of error. In the RTGS system, transactions are processed across all accounts by the RBI on a gross basis. On receiving standing instructions, transactions are processed immediately. Each transaction has a different instruction and occurs individually. The fund transfers are directly operated by the Reserve Bank of India and therefore are irreversible, while the money transfer is made. Basically, the beneficiary bank receives standing instructions for the fund transfer. Before, the Unified Payments Interface (UPI) was introduced, NEFT and RTGS were one of the most common ways to transfer money.

    To initiate a fund transfer using RTGS, IFSC code is mandatory. The sender will have to know the IFSC code of the payee/beneficiary's specific bank branch. Remember, without IFSC code, RTGS transactions cannot be processed. IFSC, expanded as Indian Financial System Code, is nothing but an alphanumeric code consisting of 11 characters which are unique. IFSC code is branch-specific and given by the RBI to all banks that fall under the RTGS and NEFT network in the country. The IFSC code can be broken down into 3 specific parts: The first part is the bank name, continued by the number “0” and then the unique branch code assigned by NEFT. It looks like this, ‘XYZ00000123’.

    Stepwise procedure for RTGS fund transfers

    • 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

    Features of RTGS Transaction:

    Here are the main features of an RTGS transaction that one should be aware of before using it:

    1. Realtime online fund transfer
    2. Used for high value transactions
    3. Safe and secure
    4. Reliable and backed by RBI
    5. Immediate clearing
    6. Funds credited on a one-on-one basis
    7. 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
    Rs.2 lakh to Rs.5 lakh Rs.30 per transaction
    Above Rs.5 lakh Rs.55 per transaction

    What are the Timings for RTGS

    Weekdays 9.00 a.m. to 4.30 p.m.
    Saturdays 9.00 a.m. to 2.00 p.m.

    Difference between RTGS and NEFT

    Criteria NEFT RTGS
    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.

    FAQs for RTGS (Real Time Gross Settlement)

    1. What is the difference between RTGS and NEFT?

      NEFT or National Electronic Fund Transfer transactions are settled in batches, while RTGS transactions are settled individually.

    2. What is the minimum and maximum limit for RTGS transactions?

      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.

    3. How long does it take for funds to get credited under RTGS?

      Generally, the funds are credited instantly. The bank will ideally credit the money within a 30 minute time frame.

    4. Will the sender/remitter receive any confirmation message or acknowledgement once the money is credited to the beneficiary/payee account?

      A confirmation SMS will ideally be sent to the remitter.

    5. In case funds are not credited to the payee/beneficiary account due to an error, will the remitter get back the money?

      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.

    6. Do all banks in India have RTGS facility?

      No. RTGS services can be availed only at RTGS-enabled banks.

    7. What is inter bank fund transfer?

      When funds are transferred from one bank account to another bank account. Basically, it is sending money to other bank accounts.

    8. Is it possible to schedule an RTGS transaction in advance?


    9. How much in advance can I schedule an RTGS transaction?

      It can be scheduled in advance of 3 working days.

    10. Can I use RTGS to send money to foreign banks?

      No. The service is only available in India with RTGS-enabled banks.

    11. How do I know if my bank is RTGS-enabled?

      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.

    12. Can RTGS transfers be made on bank holidays and Sundays?

      No. Unfortunately the service is only available on working days during the working hours of the bank.

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