RTGS Explained Quickly

RTGS stands for “Real Time Gross Settlement” and is defined as, specialist funds transfer systems where the transfer of money or securities takes place from one bank to another on a “real time” and on a “gross” basis.

Settlement in “real time” means a payment transaction is not subjected to any waiting period, with transactions being settled as soon as they are processed.

“Gross settlement” means the transaction is settled on one-to-one basis without bundling or netting with any other transaction.

“Settlement” means that once processed, payments are final and irrevocable.

RTGS fund transfer

RTGS vs NEFT

Actually both RTGS & NEFT are schemes which allow account holders in the bank to electronically transfer the funds.

  • In RTGS, settlement is on “real time” and on a “gross” basis.
  • In NEFT, settlement is on “batch” and “net” basis.

Operating Hours

NEFT operates in hourly batches, there are twelve settlements from 8am to 7pm on week days and six settlements from 8am to 1pm on Saturdays (Working Saturdays).

RTGS operates generally from 9am to 4.30pm from Monday to Friday and on working Saturday. (The timing may vary from bank to bank)

Transaction Limit

  • RTGS : Minimum – 2 Lacs, Maximum – No Limit
  • NEFT : Minimum – No Limit, Maximum – No Limit

Time Taken in RTGS Transaction

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.

[Source:RBI]

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