RTGS - Real Time Gross Settlement

The features and benefits of RTGS are as follows:

Real-time and settles transactions individually: RTGS settles each transaction individually and in real-time, ensuring that funds are transferred immediately. This feature makes it ideal for high-value transactions that require immediate settlement.

Instant availability of funds: With RTGS, the recipient can use the transferred funds immediately after the transaction is settled. This eliminates any delays in accessing the funds and allows for quick utilisation.

Safe, secure and reliable: RTGS is a safe and efficient way to transfer funds. The process ensures that the money is delivered promptly and without any delays, reducing the risk of fraud or unauthorised access.

Transparency in payment process: Both the sender and recipient receive immediate confirmation of the transaction with RTGS. This transparency reduces any potential risks or uncertainties, providing peace of mind for both parties involved.

Streamlined payment process: RTGS eliminates the need for physical checks or cash transactions, making the payment process more efficient. This not only saves time but also reduces administrative costs for businesses.

Facilitates time-sensitive payments: RTGS is crucial for businesses that require instant access to funds or need to make time-sensitive payments. It provides a reliable and fast method for completing such transactions.

Allows high-value transactions: RTGS, typically, does not have an upper limit on the amount of money that can be transferred. This makes the process an ideal choice for carrying out high-value transactions.

Available anytime, anywhere: RTGS works 24 hours a day, 7 days a week, 365 days a year (including weekends and holidays), allowing users to transfer funds without interruption, increasing convenience and ease of access.

Overall, RTGS plays a vital role in facilitating seamless and efficient financial transactions, offering speed, security, transparency, and cost savings for businesses and individuals alike.

How Does Real-Time Gross Settlement (RTGS) Work?

Real-time refers to a settlement that takes place immediately when it is received. To put it another way, as soon as the transaction is transmitted from the sending bank, it settles in the bank that received. Gross settlement refers to the handling and settlement of each transaction separately—multiple transactions are not bundled or combined together. A real-time gross settlement mechanism is built on this.

 Bank to bank cash transfers of large value that are managed and organised by a nation's central bank often employ an RTGS system. These transfers frequently call for immediate and thorough clearance. Transactions are irreversible once they have been resolved, as was already indicated.

Difference Between RTGS and NEFT

What are the Different Mediums to Complete RTGS Transactions in India?

The different mediums to complete RTGS transactions in India are as follows:

1. Internet Banking: Internet banking is a popular mode used by individuals to complete the RTGS transaction. To use this facility, you need to login to your net banking account and follow the instructions provided by the bank to carry out an RTGS transaction.
2. Mobile Banking: Another convenient mode for initiating RTGS transactions is through mobile banking apps. Customers can use their smartphones to access their bank accounts and initiate the transfer.
3. Branch Banking: Customers can also visit the branch of their bank and initiate an RTGS transaction by filling out the necessary forms and providing the required details.

RTGS Fund Transfer Process (Stepwise)

The step-by-step procedure to transfer funds via RTGS is mentioned below

Step 1: Log in to your respective bank's internet banking account by entering your username and password.

Step 2: Go to the home page and click on the Funds Transfer option.

Step 3: Proceed to choose RTGS, key in beneficiary/payee details such as account number, IFSC code, etc.

Step 4: Review all details and then submit. The funds will be credited immediately to the payee's account.

What are the Timings for RTGS?

RTGS transactions can be completed on a 24/7 basis, expect between 11:30 p.m. and 00:30 a.m. due to cut-off.

Fees and Charges for RTGS Transactions

From 1 July 2019, the Reserve Bank of India announced changes in processing and service charges for RTGS (Real Time Gross Settlement) transactions. The amount will make transfers through RTGS more affordable and customer friendly.

How to Do RTGS via Mobile Banking

To initiate an RTGS transaction via mobile banking, follow these steps:

• Login to your bank’s mobile app.
• Select “Fund Transfer” or “Payments”.
• Choose RTGS as the transfer type.
• Add beneficiary if not already added (you’ll need their name, account number, IFSC code).
• Enter the amount (minimum ₹2 lakh).
• Confirm the transaction using your OTP or MPIN.
• You will receive a confirmation SMS upon successful completion.

Banks in India that Offer RTGS Facility

There are a several banks in India that offer the RTGS facility. However, the RTGS transfer process and the relevant fees and charges are subject to vary from bank to bank. It is advisable to check the same before availing of the facility. Some major banks that offer the RTGS facility are listed below:

1. Axis Bank
2. State Bank of India (SBI)
3. HDFC Bank
4. ICICI Bank
5. RBL Bank
6. Canara Bank
7. Indian Bank
8. Bank of Baroda
9. Bank of India
10. Punjab National Bank
11. Central Bank of  India
12. UCO Bank
13. CITI Bank
14. HSBC Bank
15. Federal Bank
16. YES Bank

How to Track RTGS Transfers?

To track an RTGS transaction:

1. Use UTR Number (Unique Transaction Reference)
2. Visit your bank's website or mobile app
3. Go to “Track RTGS Status”
4. Enter the UTR number and date
5. You’ll see the status: Success, Pending, or Failed

Common RTGS Transfer Errors

Here are common RTGS issues and how to avoid them:

What Details are Required to Carry Out an RTGS Transaction?

The following information is required for an RTGS transaction

1. The amount that needs to be transferred.
2. Name of the payee/beneficiary as in the bank account,
3. IFSC code of the payee/beneficiary.
4. Account number of the payee/beneficiaries.
5. Name of beneficiary bank and bank branch.

Money can be sent using RTGS through net banking. To initiate such a transaction, it is important to collect some details from the payee such as account number, bank name, IFSC code, and account holder name. Another interesting feature of this wire transfer method is that transactions can be scheduled in advance.

Standardized Service Charges: RTGS

The all-holding bodies framed a common structure on RTGS transaction charges by the RBI to promote transparency and uniformity amongst banks: 

1. Inward Transactions – Free of Charge 

It is not permissible by banks to charge any fees to the bank in case of any incoming RTGS transfer. Therefore, the receiver will not incur any expense for receiving the funds. 

1. Outward Transactions 

Up to Rs.2 lakh to Rs.5 lakh - A maximum charge of Rs.25 (for tax to be applied) may be charged by the bank on transactions within this range. 

Above Rs.5 lakh: Upper charges of up to Rs.50 (excluding applicable taxes) may be charged by banks for outward transactions above Rs.5 lakh.

Flexibility Offered by Banks in RTGS Transactions

While these limits were defined by the RBI, there was no restriction on the banks to set lower charges for such transactions. The charges per transaction cannot exceed maximum charges as applicable from time to time. 

Objectives Behind RTGS Policy Changes

These changes are about standardizing the service charges and promoting a customer-centric approach, especially to individuals and businesses using RTGS for their own financial transactions. 

Why is Real-Time Gross Settlement (RTGS) Important?

RTGS is used by the Central Bank of India to help in minimise the risk that is involved in all transactions that are of high value. In spite of financial institutions and banks having very high-security processes in place for protecting their customer's information, threats will always be there.

This is why the RTGS process has offered a lot of security to the customers for making secure transactions by clearing all their settlements immediately.

How to Resolve Queries for RTGS Transfer?

Each bank has various customer query resolution setups that can be used by the respective customers for resolving the issues with regard to RTGS. Most banks offer a dedicated customer care helpline number, SMS service, chatbots, and email resolution services. In case you face any issue with an RTGS transaction, you can use any of the method to get it resolved by the bank. Similarly, you can also consider visiting the nearest branch office of the bank and placing a query for the same.

Points to Consider While Doing an RTGS Transfer

There are certain points you will need to keep in mind when making an RTGS transfer: 

1. You must add the beneficiary to your account before you can start to initiate an RTGS payment. 
2. The beneficiary's name, bank account number, account type, bank name, and IFSC are required to perform this 

1. The RTGS minimum transferable amount is Rs.2 lakh. 
2. The amount that can be transmitted via RTGS has no upper limit. 
3.  The RTGS service is accessible year-round, around-the-clock. 
4. Each RTGS transaction is given a UTR number, a 22-character code that is specific to that transaction and serves as a clear means of identification. 

RTGS vs. Bankers' Automated Clearing Services (BACS)

A real-time gross settlement system is distinct from a net settlement system, like the Bankers' Automated Clearing Services (BACS) or Bacs Payment Schemes Limited in the UK. Throughout the day, BACS transactions between institutions are gathered. A central bank modifies the active funds by adjusting the net amounts of the traded cash at the close of business.

The exchange of money need not occur place physically with RTGS. A central bank frequently makes computerised adjustments to the receiving and sending bank's accounts.

For instance, the balance of receiving institution Bank B will rise by Rs.1 crore while the balance of sender Bank A will decrease by Rs.1 crore.

Processing Time for RTGS Money Transfer (Real-Time)

Under typical conditions, RTGS (Real-Time Gross Settlement) guarantees that money is sent instantly. As soon as the remitting bank sends the monies, the recipient bank receives them. 

Crediting the Beneficiary's Account: The beneficiary bank must promptly credit the beneficiary's account after receiving the funds transfer notification. Standard procedures state that this procedure must be finished within 30 minutes of the transfer request being received.

RTGS Transaction Limits in India

1. Minimum Amount: The minimum amount for an RTGS transaction is ₹2 lakh. 

1. Limit per Day via Bank Branch: There is no upper limit for RTGS transactions conducted through bank branches. This allows customers to transfer any amount above Rs.2 lakh. 

1. Limit per Day via Internet Banking: For RTGS transactions performed via internet banking, a maximum limit typically applies. Many banks set this cap at ₹25 lakh, but the exact limit may vary depending on the bank’s policies. Some banks may offer higher or lower limits for online RTGS transactions. 

Critical Factors for Initiating an RTGS Transaction

Things to keep in mind when initiating an RTGS transaction are given below: 

1. Network Compatibility: Ensure that both the sending and receiving bank branches are part of the RTGS network, as transactions can only occur between banks that participate in the system. 

1. Accurate Beneficiary Details: Verify the beneficiary’s full name, account number, and account type. Additionally, confirm the name and IFSC (Indian Financial System Code) of the beneficiary’s bank branch. 

1. Account Number Accuracy: Provide the correct account number of the beneficiary. RTGS transactions are highly dependent on the accuracy of this detail. Errors can result in funds being sent to the wrong account. 

1. Documentation on Transactions: It keeps the records of RTGS transactions or remittance instructions, which serve as proof of further transaction and is helpful in case of any disputes or discrepancies. 

1. Bank Policies: Understand the specific policies regarding RTGS transactions, limits, charges (if any), additional requirements, and procedures as set by your bank.