What does RTGS stand for? RTGS or Real Time Gross Settlement is a simple payment system which processes fund transfer requests instantaneously. RTGS has a continuous mechanism that settles fund transfer requests on an order by order basis. The processing of the RTGS requests takes place as soon as they are placed, rather than lining them up for later clearance as is the case with some other modes. Because the processing takes place on an orderly basis, netting does not come into the picture.
Use of RTGS
RTGS is used to transfer a large number of funds on a real-time basis. It is used by retail as well as corporate account-holders to transfer funds instantly.
Hence, RTGS transfer helps to get you the money as soon as possible or almost instantly.
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What are the Prerequisites of using RTGS?
Now that we are aware of RTGS full form and when one would need the same, the next obvious question is what the pre-requisites to using RTGS are. In order to use the RTGS mode of transfer, one needs to have a savings bank account or a current bank account.
Are there any chances of RTGS Transfer Failures?
RTGS in simple enough terms is a mode of fund transfer and there are chances of it failing as well. A non-existent account or insufficient funds are the most common reasons for RTGS failing. Or if due to any other reasons the bank is unable to transfer money to the mentioned account number, the amount is credit back to the account of the sender. This happens as soon as the bank on the other end remits the specified amount. The amount is usually credited within an hour of the failure or at the maximum by the end of the business day for RTGS.
What are the timings?
To encourage digital payments, the Reserve Bank of India has allowed fund transfers round-the-clock. It means that RTGS is available 24×7 for 365 days. Earlier, when a customer wanted to transfer money to someone using RTGS, the window was available for from 9 AM to 4:30 PM on weekdays. The transfer window available for working Saturdays was 9 AM to 2 PM. In the event that you want to proceed with an RTGS using your net banking, the same should be done within the mentioned timeframe.
What are the limits?
The RTGS transfer mechanism was built keeping in mind a large value of transactions. Thus, you need to transfer fund beyond a certain predefined limit in order to proceed with RTGS. For retail customers, the minimum amount for RTGS is Rs. 2 Lakh. Unlike RTGS some other modes of transfer do not have a minimum requirement when it comes to transferring.
What are the charges?
The Reserve Bank of India (RBI) has removed the service charges applicable on transfer of funds via RTGS initiated online on internet/mobile banking portals.
And, for transactions initiated at the bank, the charges for RTGS may differ from one bank to another. However, there is a cap on the maximum amount that a bank can charge for RTGS based transactions. Banks cannot charge more than Rs.55 (excluding taxes) for an RTGS payment. As per RBI, service charges for RTGS should not exceed Rs. 30 for outward transactions above Rs 2 lakhs and up to Rs. 5 lakhs and not exceeding Rs. 55 for transactions exceeding Rs. 5 lakh. You can check with your bank regarding the charges before proceeding with the transactions. As one might expect, the charges go up as the transfer amount increases.
If you opt for RTGS the amount will be debited from your account instantaneously and sent to the other party within 30 minutes or an hour at the maximum. Also, the bank from which you are initiating the RTGS or the originating bank and the receiving bank need to be part of the NEFT network. You should also have the details such as account type, name of the beneficiary and IFSC code of the receiving bank. With all these, you should be able to proceed with RTGS transactions.
How is processing RTGS different from NEFT?
In NEFT the transactions received up to a particular time are processed in batches. Whereas, in RTGS, the transactions are processed continuously one by one throughout the day.
What are the things to keep in mind while processing RTGS?
- The bank who is receiving and the bank who is making the payment should be a part of RTGS network
- Beneficiary details should be available with the remitter
- Extreme care should be taken while providing the account number of the beneficiary as the credit would be solely given based on the account number
Can we get compensation for delay in returning the payment?
If there is delay in returning the failed payment, the originating customer is eligible to get a compensation at current repo rate plus 2%
What is UTR number in RTGS?
Unique Transaction Reference number is a 22-character code used to uniquely identify transaction in RTGS system.
Are the payments under RTGS final and irreversible?
Yes, the payments are final and irreversible considering the settlement of funds takes place in the book of Reserve Bank of India