RTGS stands for Real Time Gross Settlement. It is a payment system that lets you transfer money from your bank account to someone else's account instantly and safely. It is commonly used for large transactions because it processes each payment right away, instead of in groups.
You can use RTGS to pay bills, including debit and credit card payments. You can do it online or by visiting the bank.
What is Real Time Gross Settlement meaning and its use?
Let us understand the meaning of Real Time Gross Settlement (RTGS). RTGS is a payment system where transactions are processed and settled individually, in real-time. Real Time Gross Settlement (RTGS) systems facilitate the transfer of high-value transactions that require immediate settlement.
The primary objective of the RTGS system is to minimize risk and ensure an accurate reflection of an institution's account status at any given moment. Customers can avail of the RTGS facility provided by banks during designated hours on weekdays, as well as on the first and third Saturdays of each month.
Below are the features of Real Time Gross Settlement (RTGS):
Instant Settlement: RTGS allows for the immediate transfer of funds between banks, processing transactions in real time without delays.
Large-Value Transactions: It is mainly used for high-value transactions (typically over a specific threshold, e.g., ₹2 lakh in India).
Final and Irrevocable: Once a transaction is completed, it cannot be reversed or undone, ensuring the finality of payments.
Direct Transfer Between Banks: RTGS involves a direct transfer of funds from one bank to another without the need for intermediaries.
Operates During Banking Hours: RTGS is typically available during specific working hours on business days (e.g., 9 AM to 6 PM).
How to do Real Time Gross Settlement Fund Transfers?
RTGS transfers can be done in two ways: online and offline. For online transfers, you can use your bank's online banking or mobile banking services.
Depending on the option you choose, you will need to follow the steps provided below:
Through Online Banking
Most banks allow customers to use RTGS through their online banking platforms. This lets people make payments from home or work.
To do this, the user needs to log in to the bank's website, enter the payment amount, and provide the beneficiary's details to confirm the transaction.
Through Mobile Banking
Many banks offer mobile apps for RTGS transactions.
These apps let customers transfer money easily using their smartphones.
To use this service, customers just need to log in to their bank's mobile banking app.
Through Offline Mode
Customers can visit their bank branch to request an RTGS transfer.
Bank representatives will help process the transaction.
You need to fill out the RTGS form.
Provide details like the beneficiary’s name, account number, and the amount to be transferred.
What are the RTGS chargers?
RBI has removed charges on online RTGS transactions.
For offline RTGS transactions, charges may differ between banks based on the transaction amount.
Some banks may offer lower charges for premium account holders or special customers.
Charges and transaction methods may vary from one bank to another.
It is always a good idea to check with your bank for the most accurate and current information.
How Long does the RTGS Transfer Process take?
RTGS transfers happen one at a time, so the money usually reaches the beneficiary’s bank account in seconds.
Sometimes, technical issues may cause delays, and it could take a few minutes.
According to RBI rules, the beneficiary’s bank must credit the amount to the recipient’s account within 30 minutes of the transfer.
If the money is not in the account within 30 minutes, the sender should contact their bank to check for any delays.
What Should You Keep in Mind When Using RTGS Transfer?
RTGS is a fast and secure way to transfer money, but it is important to understand the rules. Here are some key points:
The money will only go into the account you specified on the RTGS form.
You cannot cancel the payment once you send the money through RTGS.
Always check the RTGS form carefully before you make the transfer.
You need to choose either RTGS or NEFT when filling out the form. If you don’t choose, the bank will decide which method to use.
If you make a mistake in the beneficiary's details, the bank is not responsible for any problems.
If the payment fails, the money will be returned to your account. If the bank doesn't refund you, you may get compensation based on the current repo rate plus 2%.
RTGS (Real-Time Gross Settlement) is for high-value transactions with immediate settlement, while NEFT (National Electronic Funds Transfer) works in batches and is used for smaller payments. RTGS operates in real-time, and NEFT has specific settlement times.
Does the remitter get back the money if an RTGS transaction is not credited to a beneficiary account?
If an RTGS transaction fails, the remitter typically gets the money refunded, but the refund process may take some time based on the bank's protocols.
What is the time taken for effecting funds transfer from one account to another under RTGS?
RTGS transactions are processed immediately, typically completed within a few hours during working hours, as they are settled in real-time.
Can I track the RTGS transaction? Do I get any acknowledgment after the funds are successfully credited into the beneficiary's account?
Yes, RTGS transactions can be tracked via the bank’s tracking service, and an acknowledgment receipt is provided after successful crediting to the beneficiary's account.
Which is preferable: NEFT or RTGS?
RTGS is preferable for urgent, high-value transactions, while NEFT is more cost-effective for lower amounts, with slightly delayed processing times.
What is Real Time Gross Settlement?
Real Time Gross Settlement (RTGS) is a payment system where transactions are processed and settled individually, in real-time, without delay. It is typically used for high-value and time-sensitive transactions between banks.
