Real-time gross settlement (RTGS)

RTGS full form & other details

RTGS full form is Real Time Gross Settlement is an electronic form of fund transfer which is managed by Reserve Bank of India and allows the interbank transfer of funds on a real-time basis. Its is known to be one of the fastest and secure interbank money transfer facility in India. Settlement in real-time means payment transactions are not put through any waiting period, the transaction is settled as soon as they are processed.

An Introduction to RTGS Process

RTGS is naturally used for High-Value Transactions that necessitate and receive instant clearing. In RTGS, the settlement is done without bundling or netting with any other transaction, the negotiation is executed individually and on a gross basis.

The customers commencing RTGS transfer are required to have an Indian Financial System Code (IFSC) of the beneficiary bank, name of the bank, account number, account holder’s name.  Both the bank branches, receiving and initiating end, have to be RTGS enabled for the transfer of the fund to be processed.

RTGS Timings:

Just like other financial transactions, the RTGS Timings for fund transfer window available from 8:00 AM to 4:00 PM from Monday to Friday and on Saturdays (excluding second and fourth).

RTGS Limit

RTGS is allowed for large value transactions or certain predefined RTGS limits in order to proceed fund transfer of minimum transaction of 2 Lakhs. If the funds are not credits in receivers account due to any reason, the fund will be returned to an original bank account within one hour or before the end period of the transaction day. It is the responsibility of the beneficiary bank to credit the recipient’s accounts within 30 minutes of receiving the fund transfer message.

RTGS Charges

In order to avail of the RTGS service or facility, you have to pay a certain amount in order to have your order processed. Each bank allowed or enables to fix their own charges for RTGS transactions, but charges differ from bank to bank.

                                            RTGS Charges

            Bank        Rs 2 to 5 LakhMore Than Rs 5 Lakh
SBI Branch            Rs 25              Rs 50
SBI – Mobile Banking           Rs 20              Rs 40 
HDFC            Rs 25             RS 50
ICICI           Rs 25             Rs 50
Bank of Baroda           Rs 28-33           Rs 55-61
Punjab National Bank         Rs 25-30           Rs 50-55
Kotak Bank             Rs 25            Rs 50
Bank of India             Rs 5               Rs 5
Canara Bank          Rs 27-30         Rs 52-55
HSBC           Rs 25             Rs 50
Yes Bank                NIL               Nil

RTGS Process

Real-Time Gross Settlement is the fastest and secure mode of online money transfer. Some preconditions for RTGS transactions.

A. The payer and receiver should have a bank account (whether it is a current or savings account).
B. The minimum transaction amount should be Rs 2 lakh per transaction and a maximum RTGS limit per day is Rs 10 lakh. 
C. The Transfer of funds must be made within the geographical boundaries of India.  

How to do Real-Time Gross Settlement? (RTGS full form)

For Online RTGS fund transfer, the following steps must be followed:

Step 1:  Login to the net banking account of the bank.

Step 2: Add beneficiary account details (Account Number, Branch name, IFSC code, Account name). 

Step 3:  Go to RTGS fund transfer which totally focuses on quick and easy fund transfer within the country. 

Step 4: Select the amount to be transferred(minimum transaction value 2 lakh per transaction. 

Step 5: Accept the terms of service(terms and conditions) mentioned.  

Step 6: Submit the Real Time Gross Settlement(RTGS) online form.  

For RTGS fund transfer to branch, the following steps must be followed:

Step 1: Visit and contact the employee of the branch of the bank in which there is an account. 

Step 2: Fill up the RTGS transaction form details. 

Step 3: Deposit the cheque and cash of the amount which needs to be remitted. 

Advantages of RTGS

The benefits of RTGS which really needs to understand how to do RTGS transactions are beneficial in the long run as everyone demands instant money transfer. So here are the advantages of RTGS:

1. Real-Time Payment Settlement:

Payments settled on a real-time basis, previously a huge amount of payments made via demand draft, which could take a period of 3 days for clearance. Now the same can be done within no time span through RTGS.

2. Better Relationship:

To ensure a healthier relationship between supplier and buyer as the huge transactions can be done in one go and without any delay.

3. Predictability of Cash Flows:

RTGS facilitates the easy and smooth flow of cash as customers know when their account will be debited or credited.

4. No threat of money and credit risk:

No credit and settlement risk or threat of money being stolen or cheques being forged, Since transactions, have done through online or bank.

Hope by reading this article you get the clear understand of Real-Time Gross Settlement aka RTGS full form. Know more about RTGS on Wikipedia here.