Money transfer from one bank to another has become far more convenient with the advent of technologies assisting in a smooth online money transfer from one banking institution to another. Systems operating under inter-bank transfer, such as NEFT and RTGS have made lives easier for those who prefer to make monetary transactions without having to physically visit a bank and yet have a secure and smooth transition in making and receiving payments. Both NEFT and RTGS are monitored by the Reserve Bank of India.
What is RTGS
RTGS or Real-Time Gross Settlement is a system where the funds transfer requests from one savings account to another are processed in real-time, i.e., as soon as they are received from the remitting bank.
- Unlike in NEFT, the fund transfer instructions under RTGS are processed individually on an order basis.
- An individual can transfer funds from one bank to another within India on an immediate basis.
- It is ideally used for high-value transactions only.
- There is a minimum cap of Rs. 2 lakh on RTGS transactions. An individual will have to resort to NEFT for any value below that.
- Although almost every bank offers these facilities to its customers, these services are not available in every bank’s branches.