What is RTGS: Timings, Full Form, Limits and Charges (2024)

What is RTGS (Real Time Gross Settlement)?

RTGS (full form – Real-time gross settlement systems) is an electronic payment system that processes and settles payment instructions between banks in “real-time” and “gross settlement” modes. The term ‘gross settlement’ refers to the individual settlement of fund-transfer instructions. Because the funds’ settlement occurs on the books of the Reserve Bank of India, the payments are final and irrevocable. The RTGS is also designed primarily for high-value transactions, with the minimum transfer amount at ₹2 lakh.

How Does RTGS Work?

According to the Reserve Bank of India, the RTGS transactions are processed continuously on a transaction-by-transaction basis throughout the day. Both the originating and the destination bank branches must be a part of the RTGS network. The service is also available 24x7x365.

Under normal circ*mstances, the beneficiary branches should receive the funds in real time as soon as funds are transferred by the remitting or originating bank. However, the beneficiary bank must credit the beneficiary’s account within 30 minutes of receiving the funds transfer message.

Importance of RTGS (Real Time Gross Settlement)

Real time gross settlement is an easy, secured and quick money transfer mechanism that is available to Indian users on a 24×7 basis across the year. The transaction charges are capped by the RBI and they also come with legal backing, making it a highly preferable method of making big-ticket fund transfers. The RTGS, along with Unified Payments Interface (UPI), National Electronic Funds Transfer (NEFT) and Immediate Payment Service (IMPS) have significantly revolutionised India’s digital economy offering safe, convenient and seamless cashless transactions over the last few years.

Because the transaction is completed almost instantly, the risk associated with the transfer of funds is significantly reduced. The simple, quick, and secure money transfer system is ideal for businesses and a boon to the economy as a whole. Real-Time Gross Settlement (RTGS) is one of the significant and appreciable systems among the many Digital India initiatives.

Features and Benefits of RTGS

The following are the features of RTGS:

• RTGS transactions are secure and safe.
• Transactions are settled on a one-to-one basis in real-time.
• There are no geographical restrictions on RTGS fund transfers within India.
• Customers can use their mobile devices or laptops to access internet banking from anywhere and transfer money to other bank accounts using RTGS.
• The RTGS service is available 24 hours a day and seven days a week, even on weekends and bank holidays.
• Any amount above ₹2 lakh can be transferred using the RTGS mechanism subject to third-party transfer limits set by the customer and as per the bank’s policies.
• The remitting customer will only need to furnish a few basic details like the account number to be debited from, name and IFSC of the beneficiary bank and branch and the name and account number of the beneficiary customer to send funds via RTGS.

Why RTGS?

• It’s a safe and almost-instant cashless money transfer mechanism meant for high value transactions
• RTGS is managed by the RBI and the transactions come with legal backing minimising the possibility of fraud
• The RTGS charges are capped by the RBI
• The facility is available on a 24x7x365 basis
• The RTGS facility can be used by anyone, anywhere in India using internet banking or mobile banking

Ways to Make RTGS Transaction

Online Process

Login to your bank’s netbanking portal via website or mobile app, check if RTGS is active, enter the beneficiary account name, number and IFSC, enter the amount and initiate the transfer followed by entering the OTP received on your registered mobile or email id.

Offline Process

Visit your nearest bank branch, fill in the RTGS form with all the required details like beneficiary name, account number, IFSC, transfer amount, etc. and pay the amount via cash or cheque at the branch.

How to Do RTGS Transfer?

• Step 1: Sign in to your net banking account using your login username and password
• Step 2: Select the RTGS option from the Fund Transfer tab
• Step 3: Under RTGS, enter the beneficiary’s name and account information, including the bank’s name, account number, and IFSC code.
• Step 4: Click ‘Confirm’ to initiate the transfer
• Step 5: Enter the OTP received on your registered mobile number or email id to activate the transfer. Check confirmation SMS or email to check status.

Information Required to do an RTGS Transaction

• Amount to be remitted
• Valid account number to be debited from
• Name, branch and IFSC code of the beneficiary bank
• Name and account number of the beneficiary user

RTGS Charges

The RBI has waived RTGS charges for transactions made through net banking and mobile apps to increase the popularity of online money transfers. As a result, you will no longer be charged a processing fee if you send money using RTGS through online channels.

However, for offline RTGS transactions initiated through bank branches, you may be required to pay a transaction fee. You must also pay the applicable GST on the transferred amount. It is important to note that RTGS transaction charges for offline transactions vary by bank.

For example, the RTGS charges for Rs.2 lakh INR would be Rs.25+ GST.

There are also internal transaction limits above which the RTGS service charges change. Before initiating a transaction request, you should therefore check what your bank charges for RTGS transfers.

RTGS Limits

The minimum RTGS transaction amount is ₹2 lakh. Some banks might have a maximum daily limit of ₹25 lakh or ₹50 lakh for online transactions; however, if the RTGS transaction is done through a bank branch, there is no upper RTGS limit in India.

Timeline for Scheduling an RTGS Transaction

RTGS transfer timings can be initiated 24 hours a day, seven days a week and throughout the year, including on weekends and public holidays. However, offline RTGS transactions are likely to be subject to branch timings and working days.

Difference Between NEFT and RTGS

The following are the key distinctions between NEFT and RTGS:

Final Word

RTGS is an RBI-backed fund transfer method that allows you to conduct high-value transactions securely and seamlessly. Because there is no maximum amount transferable, RTGS has become one of India’s most preferred modes of transaction, particularly among retail and corporate customers.

Unlike NEFT, where funds are transferred in batches, RTGS transactions are completed in real-time. Banks begin processing transfer instructions as soon as they are received. As a result, the settlement is done instruction by instruction. We hope this article will help you make informed decisions about RTGS.

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Disclaimer

This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.