RTGS - Real Time Gross Settlement

Thanks to technology, transferring funds to anyone across the country is now easy and convenient. There are numerous options available for doing the same. NEFT, IMPS, and RTGS are a few electronic methods of fund transfer. Every method has its own set of features and limitations. Let’s briefly understand what RTGS stands for, what is the RTGS process, how is RTGS payment done, and the real RTGS meaning in banking. 

What is RTGS?

The RTGS full form is Real Time Gross Settlement it is important to understand that RTGS is a fund transfer mechanism that allows real-time fund transfers on a gross basis. Thus, for easy understanding, RTGS may be divided into three-term

1.    Real-Time – All fund transfer requests are processed on a real-time basis. Thus, once the remitter submits the fund transfer request via the RTGS fund transfer mechanism, the funds are immediately credited in the beneficiary account.

2.    Gross - Unlike in the NEFT fund transfer system, where transaction credits are run in batches, in RTGS, each fund transfer request is considered as Gross or complete. Therefore, each fund transfer request is handled individually.

3.    Settlement - Once transferred, funds are considered 'settled' and transaction 'concluded'. Thus, a transaction cannot be reversed. Also, as the settlement of funds takes place in the books of the Reserve Bank of India (RBI), the country's apex bank, the payments made through the RTGS payment mechanism are considered final and irrevocable. 

RTGS is meant for high-value transactions, with RTGS minimum amount transfer being Rs. 2 lakh. The amount transfer settlement request takes place on an instruction basis and is not dependent on batch clearing; therefore, it ensures real-time fund transfer. It is an online payment mechanism offered by most banks across the country. The settlement of funds takes place in the books RBI; the payments made through RTGS are therefore final and irrevocable.

Additional Info: Also, check Unified Payment Interface (UPI) the most preferred mode of digital payment.

As per RBI notification, it is beginning 14th December 2020 RTGS payment system is now available round-the-clock. This means that, unlike earlier times when RTGS time was fixed between 7:00 AM to 6:00 PM on all working days, except for the 2nd and 4th Saturday, all Sunday, and holidays, the RTGS time is now extended to 24×7 a day, 365 days a year. However, there are different RTGS Banking Service Hours for different banks.

As the name suggests, RTGS payment is a real-time fund transfer system. The money is credited to the beneficiary account within a few minutes. The entire debit/credit process is assumed to be completed in a maximum of 30 minutes. 

The transfer of funds via RTGS involves a pre-set procedure. The step-by-step process is mentioned as below:

Step 1: Log in to your bank account through Net Banking or Mobile Banking. Alternatively, visit your bank branch to initiate an RTGS fund transfer process. The online channel will require your internet bank account login Username and Password.

Step 2: Move to the home page and select the Funds Transfer option.

Step 3: Choose from the existing beneficiary names or add a new payee by following the steps to add Beneficiary for RTGS.

Step 4: Choose RTGS as the payment option. Enter the amount details to be transferred to the beneficiary account and click ‘Submit’.

Additional Info: Also, check Axis Bank Net Banking service.

Step 1- Log in to your bank account using your user ID and password.

Step 2– Navigate to the ‘Funds Transfer’ tab.-

Step 3- Click on ‘Add a Payee’.

Step 4– Enter the Beneficiary Account details, namely Bank Name, Name of Beneficiary as used in account, IFSC code, Account Type, etc.

Step 5– Submit the information by clicking on ‘Add’ and ‘Confirm’.

Step 6– Authenticate the registration request by OTP. The OTP will be received on the mobile number as registered with the bank account.

Once the registration request is successfully authenticated through OTP, the Payee is available for RTGS fund transfer.

RTGS fund transfer mechanism is designed for high-value transactions. The RTGS minimum amount for which a payment transaction can be initiated is Rs. 2 lakh. There is no upper limit restriction on RTGS payment by RBI. However, different banks have fixed a maximum RTGS payment amount too.

If all prerequisites are met, RTGS allows fund transfer to any bank within the country. However, certain service charges are levied if you initiate a fund transfer request through RTGS. The RTGS Transaction Charges are as under

• No charges for inward remittance of funds through RTGS
• No charges if the RTGS payment request is initiated online via internet banking or mobile banking.
• An RTGS fund transfer request up to Rs. 5 lakh attracts a service charge of a maximum of up to Rs.30 per transaction plus GST.

For RTGS transactions of more than Rs.5 Lakh, a service charge cap has been fixed at 

RTGS stands for Real-Time Gross Settlement, whereas NEFT means National Electronic Fund Transfer. Although both are electronic fund transfer mechanisms, they are different in many ways. The few notable differences between RTGS and NEFT are: