Wednesday, April 14, 2010

What is RTGS in RBI

RTGS:  Have to heard of this acronym ????
Yes,  this is very much used in Banking Field,  and  a fastest possible way of Money Transfer through the Banking channel in comparison to EFT ( Electronic Fund Transfer System)  and NEFT (National Electronics Funds Transfer System)  .

 RTGS – stands for  Real Time Gross Settlement .  RTGS system is a funds transfer mechanism, where  money transfer takes place from one bank to another bank  on a  “real time” and on a  “ Gross” basis ,  and  transfer takes place in the books of the Reserve Bank of India (RBI) .

Real time means  -payment transaction is not subjected to any waiting period and is settled as soon as they are processed in Gross settlement  without  bunching with any other transaction .  Since money transfer takes in RBI , the payment is considered  as Final and Irrevocable.

Minimum amount to be remitted through RTGS  is Rs. 1 lakh  and  maximum transaction time is 2 hours.  Not all Bank Branches in India are RTGS  enabled.   Nearly 26000 Bank Branches in India have this facility of  Fund Transfer.