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RTGS

1. What is RTGS System?
The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting). 'Real Time' means the processing of instructions at the time they are received rather than at some later time.'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.

2. How RTGS is different from National Electronics Funds Transfer System (NEFT)?
NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes place with all transactions received till the particular cut-off time. These transactions are netted (payable and receivables) in NEFT whereas in RTGS the transactions are settled individually. For example, currently, NEFT operates in hourly batches - there are eleven settlements from 9 am to 7 pm on week days and five settlements from 9 am to 1 pm on Saturdays. Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time Contrary to this, in the RTGS transactions are processed continuously throughout the RTGS business hours.

3. 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 lakh. There is no upper ceiling for RTGS transactions.

4. What is the time taken for effecting funds transfer from one account to another under 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 two hours of receiving the funds transfer message.

5. Would the remitting customer receive an acknowledgement of money credited to the beneficiary's account?
The remitting bank receives a message from the Reserve Bank that money has been credited to the receiving bank. Based on this the remitting bank can advise the remitting customer that money has been delivered to the receiving bank.

6. Would the remitting customer get back the money if it is not credited to the beneficiary's account? When?
Yes.It is expected that the receiving bank will credit the account of the beneficiary instantly. If the money cannot be credited for any reason, the receiving bank would have to return the money to the remitting bank within 2 hours. Once the money is received back by the remitting bank, the original debit entry in the customer's account is reversed.

7. Till what time RTGS service window is available?
The RTGS service window for customer's transactions is available from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 13.30 hours on Saturdays for settlement at the RBI end. However, the timings that the banks follow may vary depending on the customer timings of the bank branches.

8. What about Processing Charges / Service Charges for RTGS transactions?
With a view to rationalize the service charges levied by banks for offering funds transfer through RTGS system, a broad framework has been mandated as under: 

a) Inward transactions – Free, no charge to be levied.

b) Outward transactions – 
Rs. 2 lakh to Rs. 5 lakh - not exceeding Rs. 30 per transaction.
 Above Rs. 5 lakh - not exceeding Rs. 55 per transaction.

9. What is the essential information that the remitting customer would have to furnish to a bank for the remittance to be effected?
The remitting customer has to furnish the following information to a bank for effecting a RTGS remittance:
Amount to be remitted
Remitting customer’s account number which is to be debited
Name of the beneficiary bank
Name of the beneficiary customer
Account number of the beneficiary customer
Sender to receiver information, if any
The IFSC Number of the receiving branch 

10. How would one know the IFSC code of the receiving branch?
The beneficiary customer can obtain the IFSC (Indian Financial System Code) code from his bank branch. The IFSC code is also available on the cheque leaf. The IFSC code is also available on the RBI website. This code number and bank branch details can be communicated by the beneficiary to the remitting customer.

Courtesy: RBI
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