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What is RTGS




Define RTGS :

The full form of RTGS is "Real Time Gross Settlement".    It is a project which is mainly handled by RBI and it can be defined as "the continuous (real-time) settlement of funds transfers individually on an order by order basis (i.e. without netting)".

 

What Do We mean by Real Time ? What is the meaning of Gross Settlement ?

Here the words 'Real Time' means that  the processing of instructions is done at the time they are received itself, rather than at some later time.    On the other hand 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).   The settlement of funds actually takes place in the books of RBI and thus the payments are considered as final and irrevocable. 

 

What is the difference between RTGS and NEFT (National Electronic Fund Transfer) ?

 

NEFT is another  electronic fund transfer system.   However, NEFT operates on a Deferred Net Settlement (DNS) basis rather than on real time basis.   Thus, under NEFT transactions  are settled in in batches.    Under DNS, the settlement takes place with all transactions received till the particular cut-off time and all such transactions are also netted (i.e. payable and receivables and netted).   RBI operates NEFT  in hourly batches  (RBI can change the timing of settlement of batches with prior intimation to banks) for example   there are eleven settlements from 9 am to 7 pm on week days and five settlements from 9 am to 1 pm on Saturdays under NEFT.   Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time.  On the other hand in RTGS,  transactions are processed continuously throughout the RTGS business hours.

 

What is the minimum amount that can be transferred through RTGS ?  Is there any upper limit for transfer of funds under RTGS?

 

Under RTGS, the minimum amount that can be remitted is Rs 2 lakh because RTGS is meant only for high value transactions.   However, there is no maximum limit or upper limit for transfer of funds through RTGS.  

 

How much time it takes to transfer the funds through RTGS ?  I do not see that tranfer takes place on real time basis ?

In terms of the procedure as laid down by RBI,  the beneficiary branches are expected to receive the funds on real time basis i.e.  as soon as funds are transferred by the remitting bank.  However, there are delays due to processing at the remitting and receiving bank.   RBI has allowed the beneficiary banks to credit the beneficiary's account within two hours of receiving the funds transfer message.   Thus, we do not see the transfers on real time basis and there are some delays.   It is hoped that slowly this time will get reduced as more and bank and branches improve their internal transfer systems.

 

What are timings for remitting of funds through RTGS ?

RBI keeps its  RTGS service window for customer's transactions from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 13.30 hours on Saturdays for settlement at the RBI end.   (RBI can changes these business hours after giving due notice to Banks).  However, the actual timings that banks follow vary depending on the customer timings of the bank branches and cushion kept by branches for sending the message to RBI.

Where can I fund IFSC code?

The easiest way to find IFSC code is to ask the beneficiary to give you the same as now a days all cheque books also have IFSC code printed on every cheque.   The person / organisation to whom you wish to send the money, can find out the same by merely going through the cheque leaf available with them.  It is also available on RBI website

 

What are the charges for remitting the funds through RTGS ?

Each bank can decide the remitting charges for RTGS but these have to be within the following range prescribed by RBI :

a) For Inward transactions – No charge  (Free)

b) Outward transactions –

        (i)  Rs. 2 lakh to Rs. 5 lakh - not exceeding Rs. 30 per transaction.
        (ii) Above Rs. 5 lakh - not exceeding Rs. 55 per transaction
 

 

Whom Should We contact if our amount is not credited or there is a delay in credit of the funds ?

You should first contact your bank branch and lodge a complaint, but if the same is not resolved, you can also lodge a complaint at the following address of RBI :-

The Chief General Manager,
Reserve Bank of India,
Customer Service Department,
1st Floor, Amar Building, Fort,
Mumbai – 400 001

or can send an email to cgmcsd@rbi.org.in