RTGS

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