Real Time Gross Settlement (RTGS)

Real Time Gross Settlement (RTGS) was introduced in the year 2004, is an electronic form of fund transfer where the transfer of money takes place from one bank to another bank on a real-time and gross basis. Reserve Bank of India (RBI) maintains and operates the RTGS system by providing the efficient and faster fund transfer among banks facilitating their financial operations. Therefore, RTGS is the continuous process of settling payments on an individual order basis without netting debits with credits across the books of a central bank (e.g. bundling transactions). Once completed, real-time gross settlement payments are final and irrevocable.

RTGS

Under RTGS, the settlement means the transaction made are settled as soon as they are processed without any waiting period. ' Gross settlement' means the transaction is settled on one to one basis without bunching or netting with any other transaction. Considering that funds transfer takes place in the books of the Reserve Bank of India, the payment is taken as final and irrevocable. Know about How to Reverse Money Transferred to Wrong Account.

Advantage of RTGS

The benefits of RTGS given to the customer are as follows:

Real-time Payment Settlement: Payments settled in real time on a transaction-by-transaction basis, as soon as the system accepts them.
No Credit Risk: There is no credit and settlement risk involved in RTGS system for receiving participant as each payment transaction is settled instantly.
Predictability of Cash Flows: RTGS facilitates predictability of cash flows as customers know when their accounts will be debited or credited.
Benefits to Economy: The instant finality of payments ensures fast, secure and irrevocable settlement of major business and financial market transactions.

Transactions Supported through RTGS

The following are the transactions supported through RTFS system.

Inter-bank Payments
Customer Payments
Own Account Transfers
Net Clearing
NDS / CCIL

Information Required for Remittance

The required information that the remitting customer would have to furnish to a bank for the remittance are as follows:

Amount to be remitted
Account number which is to be debited
Name of the beneficiary bank
Name of the beneficiary customer
Account number of the beneficiary customer
Sender to receiver information, if any
The IFSC Number of the receiving branch.

Transaction Process involved in RTGS

The transaction process involved in RTGS is explained below in step by step procedure. Step 1: The customer has to submit the outward Instruction slip. Step 2: The verification of Instruction slip (Clear funds, name and a/c no. of the customer, IFSC code, signature) take place. Step 3: The branch scans the Instruction slip and sends it to the RTGS Central Team. Step 4: The branch will file the slip to maintain records. Step 5: The RTGS Central Team executes the transaction in Finacle and Participant Interface (PI) of RTGS. Step 6: Then the message moves to the