Real-time Gross Settlement (RTGS)

Real-time gross settlement systems (RTGS) is an electronic payment system in which payment instructions between banks are processed and settled individually and continuously on a "real time" and “gross settlement" basis. 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable.

The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is 2 lakh. There are no charges for RTGS.

Under normal circumstances the beneficiary branches are expected to receive the funds in real time as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary's account within 30 minutes of receiving the funds transfer message.

RTGS is available 24x7x365 with effect from December 14, 2020 subject to below mentioned limits on Transaction amount and timings. However, transactions initiated between 11:30 PM to 01:00 AM will be settled at 02:00 AM due to End of Day and Start of Day Process.

Frequently Asked Questions

What does RTGS stand for?

The acronym 'RTGS' stands for Real Time Gross Settlement, which can be explained as a system where there is continuous and real-time settlement of fund-transfers, individually on a transaction-by-transaction basis (without netting). 'Real Time' means the processing of instructions at the time they are received; 'Gross Settlement' means that the settlement of funds transfer instructions occurs individually.

Is there any minimum / maximum amount stipulation for RTGS transactions?

The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is ₹ 2,00,000/- with no upper or maximum ceiling.

Are the payments under RTGS final and irrevocable?

Considering that the funds settlement takes place in the books of the Reserve Bank of India (RBI), the payments are final and irrevocable.

What care should be taken while originating an RTGS transaction?

The following should be ensured while putting through a funds transfer transaction using RTGS –

• Originating and destination bank branches are part of the RTGS network.
• Beneficiary details such as beneficiary name, account number and account type, name and IFSC of the beneficiary bank branch should be available with the remitter.
• Extreme care should be exercised in providing the account number of the beneficiary, as, during processing RTGS transactions, the credit will be given to the customer’s account solely based on the account number provided in the RTGS remittance instruction / message.
• Responsibility to provide correct inputs in the payment instructions, particularly the beneficiary account number information, rests with the remitter / originator.

What happens if I write wrong account number of beneficiary?

The credit is given to the account number written / given by remitter in his / her application / instruction. Credit to beneficiary account is released solely based on account number. It is the responsibility of remitting customer to write correct account number. The originator / sender should exercise due care in providing the correct account number of the beneficiary, in the RTGS remittance instruction / application.

In RTGS, why is credit to the beneficiary given solely based on account number?

Transactions in RTGS happen in real time and it is not possible to match name and account number before affording credit to the beneficiary. Since name in the Indian context is spelt differently and would not really match with that available with the beneficiary bank, the process of affording credit solely based on the account number of the beneficiary has been enabled.

What is Legal Entity Identifier and how is it relevant in case of RTGS transactions?

The FAQs on “Legal Entity Identifier (LEI) for Large Value Transactions in Centralised Payment Systems” on the RBI website at https://www.rbi.org.in/Scripts/FAQView.aspx?Id=140 can be referred to.

Which transactions should include LEI information?

All single payment transactions of ₹50 crore and above undertaken by entities (non-individuals) should include remitter and beneficiary LEI information. Governments or their departments / ministries and individual accounts are exempted from this requirement.

Is RTGS a 24x7 system or are there some timings applicable?

RTGS is available 24x7x365 with effect from December 14, 2020 subject to below mentioned limits on Transaction amount and timings. However, transactions initiated between 11:30 PM to 01:00 AM will be settled at 02:00 AM due to End of Day and Start of Day Process.