RTGS – Meaning, Timing, Limit and Charges for RTGS Fund Transfer.

Last Updated on August 10, 2021

rtgs - realtime gross settlement, rtgs timing, rtgs charges

Table of Contents

What is RTGS?

The term “Real-time Gross Settlement” or RTGS refers to a particular type of fund transferring system to transfer money from one bank to another bank account in a different bank.

It works as a continuous process for settling down payments in real-time based on an individual transaction-by-transaction mechanism without netting. The simplified approach of transaction management of this system makes it an essential system for central banks.

How does RTGS transaction work?

By real-time, it means an immediate settlement of fund transfer. The RTGS transactions settle in the receiving bank immediately after transferring from the sending bank. Here gross settlement refers to a particular settlement method of funds transfer where transactions occur individually without clubbing multiple transactions altogether.

RTGS is used for high-value interbank fund transfers. The central bank of India (RBI) operates and manages the RTGS system. RTGS transfer frequently requires immediate completion and clearing. However, as soon as the transaction settlement is complete, it has no reversal scope.

Information needed for RTGS Transfer

Here is a list of information that needs to be furnished to a bank to initiate the Real-time gross settlement remittance.

  • Consider the amount you want to transfer.
  • Ensure your account number from where the bank will debit your funds for the transaction.
  • Name of the beneficiary’s bank and respective branch.
  • Account number of the beneficiary customer.
  • Name of the payee.
  • IFSC number of your beneficiary’s bank branch.
  • Sender-to-receiver information (optional).

How to do RTGS Transfer?

Before opting for the RTGS fund transfer, you need to know the steps accurately to make the transaction.

  • Log into the internet banking account of your bank by inputting your user ID and password.
  • Go to the Homepage or Dashboard and tap on the option of “Funds Transfer”.
  • Select the option of RTGS from the drop-down list. Then enter the account details of the beneficiary.
  • Thoroughly check all the information you inserted and finally Submit. Once done, the system credits the money to your beneficiary’s bank account within 30 minutes.

Advantage of Real Time Gross Settlement

The real-time gross settlement system is a much more lucrative banking system and includes several benefits. Following are a few merits of opting for Real-Time Gross Settlement.

  • It is pretty safe and secure for fund transferring purposes.
  • The remitter does not require any physical cheque or demand draft to make a transaction.
  • Each of the transactions has its legal backing.
  • Fund transfers through RTGS does not have any limit.
  •  The RBI caps the charges for RTGS transactions.
  • The beneficiary or payee need not visit a bank branch to submit paperwork-based instructions.
  • The beneficiary will not have to worry regarding loss/ theft of physical instruments or the chances of facing fraudulent encashment.
  • It let remitters make payments from their place of work via internet banking.
  • The RTGS timings have no bounds. This funds transfer system is accessible at your fingertips 24×7 all days throughout the year as per the latest notification by RBI.

RTGS vs NEFT

NEFT stands for National Electronic Fund Transfer. It works as an electronic fund transfer mode that operates on a Deferred Net Settlement (DNS) basis. It does settlement of transactions in batches and occurs at a particular interval of time. All the transactions remain held up till that specific time. Businesses use RTGS for a high-value business transaction, e.g., vendor payment, bulk payouts, salary payout.

For instance, the NEFT settlement occurs 6 times a day during the weekdays and 3 times on Saturdays. Suppose you opt to initiate any NEFT transaction after a designated settlement time. In that case, you need to wait until the next assigned settlement time.

On the contrary, in Real Time Gross Settlement, the settlement member banks process the transactions continuously without any waiting period during business hours.

Conclusion

The inclusion of the real-time gross settlement system in the banking network has added many benefits to the entire industry. It not only includes significant security coverages but also simplifies the fund transferring process, benefiting several users.

FAQs

1. Will the remitting customer get back the money if not credited to the beneficiary account?

Yes. If RTGS transfer fails to credit funds to the respective beneficiary’s account, the money received at the RTGS-member bank will be sent back to the originating bank within an hour of receipt of the payment or before the end of the RTGS business day.

2. What is the timing of RTGS?

The RTGS service window for a customer’s transaction remains available for 9.00 – 15.00 hours on weekdays. Whereas, on Saturdays, it remains open from 9.00 – 12.00 hours. However, RTGS timings may vary depending on the timings of the remitters’ branches.

3. Can the remitting customer track the remittance transaction?

When the RTGS system credits funds into the beneficiary’s account through internet banking, the remitting customer gets a confirmation through an e-mail/ SMS. But when done through the bank’s branch, remitters must contact the RTGS/ NEFT Customer Facilitation Centers for tracking remitted transactions.

4. Can I use a previous RTGS beneficiary to complete an RTGS payment without re-entering the payee’s details?

Yes, the “RTGS Payees” tab comes with a list of already-added RTGS beneficiaries. So, while you select the payee’s name and tap on the “Pay Payee” button, the “Enter RTGS Payment” screen automatically shows the details of the selected payee. Also, from this screen, you can choose any previous payee from the drop-down box of “Select RTGS Payee.”

5. What is the RTGS limit in transactions?

The minimum RTGS limit is Rs. 2 lakhs. There is no maximum limit for RTGS transactions when you do the RTGS fund transfer by visiting the bank branch. However, if you do RTGS fund transfer through internet banking, you can send a maximum of Rs. 25 lakhs to a payee per day.

6. Can a customer initiate a transaction for a future date?

No, the RTGS system does not accept future dated transactions.

7. What is UTR number?

UTR stands for Unique Transaction Reference (UTR). UTR number is a 22-character code used to identify a transaction in the RTGS system uniquely.

8. How much time does RTGS take to transfer money?

Fund transferred through RTGS reaches the beneficiary branch in real time, however, it may take up to 30 minutes to show in the beneficiary bank account.

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About the Author: Om Prakash