What is RTGS: Timings, Full Form, Limits and Charges
What is RTGS (Real Time Gross Settlement)?
RTGS (full form – Real-time gross settlement systems) is an electronic payment system that processes and settles payment instructions between banks in “real-time” and “gross settlement” modes. The term ‘gross settlement’ refers to the individual settlement of fund-transfer instructions. Because the funds’ settlement occurs on the books of the Reserve Bank of India, the payments are final and irrevocable. The RTGS is also designed primarily for high-value transactions, with the minimum transfer amount at ₹2 lakh.
How Does RTGS Work?
According to the Reserve Bank of India, the RTGS transactions are processed continuously on a transaction-by-transaction basis throughout the day. Both the originating and the destination bank branches must be a part of the RTGS network. The service is also available 24x7x365.
Under normal circumstances, the beneficiary branches should receive the funds in real time as soon as funds are transferred by the remitting or originating bank. However, the beneficiary bank must credit the beneficiary’s account within 30 minutes of receiving the funds transfer message.
Importance of RTGS (Real Time Gross Settlement)
Real time gross settlement is an easy, secured and quick money transfer mechanism that is available to Indian users on a 24×7 basis across the year. The transaction charges are capped by the RBI and they also come with legal backing, making it a highly preferable method of making big-ticket fund transfers. The RTGS, along with Unified Payments Interface (UPI), National Electronic Funds Transfer (NEFT) and Immediate Payment Service (IMPS) have significantly revolutionised India’s digital economy offering safe, convenient and seamless cashless transactions over the last few years.
Because the transaction is completed almost instantly, the risk associated with the transfer of funds is significantly reduced. The simple, quick, and secure money transfer system is ideal for businesses and a boon to the economy as a whole. Real-Time Gross Settlement (RTGS) is one of the significant and appreciable systems among the many Digital India initiatives.
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Features and Benefits of RTGS
The following are the features of RTGS:
- RTGS transactions are secure and safe.
- Transactions are settled on a one-to-one basis in real-time.
- There are no geographical restrictions on RTGS fund transfers within India.
- Customers can use their mobile devices or laptops to access internet banking from anywhere and transfer money to other bank accounts using RTGS.
- The RTGS service is available 24 hours a day and seven days a week, even on weekends and bank holidays.
- Any amount above ₹2 lakh can be transferred using the RTGS mechanism subject to third-party transfer limits set by the customer and as per the bank’s policies.
- The remitting customer will only need to furnish a few basic details like the account number to be debited from, name and IFSC of the beneficiary bank and branch and the name and account number of the beneficiary customer to send funds via RTGS.
Why RTGS?
- It’s a safe and almost-instant cashless money transfer mechanism meant for high value transactions
- RTGS is managed by the RBI and the transactions come with legal backing minimising the possibility of fraud
- The RTGS charges are capped by the RBI
- The facility is available on a 24x7x365 basis
- The RTGS facility can be used by anyone, anywhere in India using internet banking or mobile banking
Ways to Make RTGS Transaction
Online Process
Login to your bank’s netbanking portal via website or mobile app, check if RTGS is active, enter the beneficiary account name, number and IFSC, enter the amount and initiate the transfer followed by entering the OTP received on your registered mobile or email id.
Offline Process
Visit your nearest bank branch, fill in the RTGS form with all the required details like beneficiary name, account number, IFSC, transfer amount, etc. and pay the amount via cash or cheque at the branch.
How to Do RTGS Transfer?
- Step 1: Sign in to your net banking account using your login username and password
- Step 2: Select the RTGS option from the Fund Transfer tab
- Step 3: Under RTGS, enter the beneficiary’s name and account information, including the bank’s name, account number, and IFSC code.
- Step 4: Click ‘Confirm’ to initiate the transfer
- Step 5: Enter the OTP received on your registered mobile number or email id to activate the transfer. Check confirmation SMS or email to check status.
Information Required to do an RTGS Transaction
- Amount to be remitted
- Valid account number to be debited from
- Name, branch and IFSC code of the beneficiary bank
- Name and account number of the beneficiary user
RTGS Charges
| Transaction Type | Applicable Charges |
| Transaction Inward | Nil |
| Online Transaction | Nil |
| Transaction Outward (from ₹2L to ₹5L) | Not exceeding ₹25 (excluding GST) |
| Transaction Outward (above ₹5L) | Not exceeding ₹50 (excluding GST) |
The RBI has waived RTGS charges for transactions made through net banking and mobile apps to increase the popularity of online money transfers. As a result, you will no longer be charged a processing fee if you send money using RTGS through online channels.
However, for offline RTGS transactions initiated through bank branches, you may be required to pay a transaction fee. You must also pay the applicable GST on the transferred amount. It is important to note that RTGS transaction charges for offline transactions vary by bank.
For example, the RTGS charges for Rs.2 lakh INR would be Rs.25+ GST.
There are also internal transaction limits above which the RTGS service charges change. Before initiating a transaction request, you should therefore check what your bank charges for RTGS transfers.
RTGS Limits
The minimum RTGS transaction amount is ₹2 lakh. Some banks might have a maximum daily limit of ₹25 lakh or ₹50 lakh for online transactions; however, if the RTGS transaction is done through a bank branch, there is no upper RTGS limit in India.
Timeline for Scheduling an RTGS Transaction
RTGS transfer timings can be initiated 24 hours a day, seven days a week and throughout the year, including on weekends and public holidays. However, offline RTGS transactions are likely to be subject to branch timings and working days.
Difference Between NEFT and RTGS
The following are the key distinctions between NEFT and RTGS:
| Point of Difference | NEFT | RTGS |
| Minimum Amount Transferable | No limit | ₹2 lakh |
| Maximum Amount Transferable | No limit, but subject to internal daily limits imposed by banks on online transfers | No limit, but subject to internal daily limits imposed by banks on online transfers |
| Settlement Type | Amount settled in batches | Amount settled on a transaction-by-transaction basis |
| Settlement Time | Up to 30 mins or 2 hours | Immediate |
| Transfer Timings | 24x7x365 | 24x7x365 |
| Transfer Mode | Online and offline | Online and offline |
| Additional Charges | For transactions up to ₹10,000: Max ₹2.5For transactions between ₹10,000 and ₹1L: Max ₹5For transactions between ₹1L and ₹2L: Max ₹15For transactions above ₹2L: Max ₹25*All exclusive of GST | Outward transaction up to ₹5 lakh: Max ₹25 (exclusive of taxes)Outward transaction above ₹5 lakh: Max ₹50 (exclusive of taxes) |
| Frequency of Batches | 48 per day | Continuous process |
Final Word
RTGS is an RBI-backed fund transfer method that allows you to conduct high-value transactions securely and seamlessly. Because there is no maximum amount transferable, RTGS has become one of India’s most preferred modes of transaction, particularly among retail and corporate customers.
Unlike NEFT, where funds are transferred in batches, RTGS transactions are completed in real-time. Banks begin processing transfer instructions as soon as they are received. As a result, the settlement is done instruction by instruction. We hope this article will help you make informed decisions about RTGS.
FAQs
RTGS systems, which central banks around the world are increasingly using, can help to reduce the risk of high-value payment settlements between financial institutions. With RTGS large sums can be transacted almost instantly.
It is a safe and secure method of transferring funds. RTGS-type systems protect financial data by making it vulnerable to hackers for a shorter period of time. This is among the best features of RTGS.
Details required for RTGS transaction are the following:
– The sum that must be transferred.
– The payee’s or beneficiary’s IFSC code.
– The payee’s or beneficiary’s account number.
– Beneficiary bank and branch information
This is determined by the amount you wish to send. If the amount exceeds Rs.2 lakh, prefer RTGS. NEFT is best for small-value transactions, while RTGS is best for large-value transactions. RTGS is a real-time fund transfer mechanism, whereas NEFT takes time.
Because the fund’s settlement occurs in the Reserve Bank of India’s books, the payments are final and irrevocable.
Beneficiary bank branches typically receive RTGS funds real time as soon as the funds are transferred by the remitting bank.
Upon visiting a bank branch, the customer needs to fill details like transfer amount, cheque number (if required), sender’s name, account number, contact number, account type (i.e. savings or current or overdraft, etc.), and beneficiary’s name, bank name, branch, IFSC code, and account number in the RTGS form.
On the cheque, write Pay “Yourself- RTGS remittance”, make it A/C payee cheque, and enter the amount in figures as well as words and sign. On the back side of the cheque, write the beneficiary’s name, account number, bank, branch and IFSC code. Remember, the cheque needs to be submitted alongwith a duly-filled RTGS form.
Yes, provided the bank branch is one of the 1.6 lakh+ RTGS-enabled bank branched in the country. For the updated list of RTGS-enabled bank branches in India, visit: rbi.org.in/
Offline RTGS payments at participating bank branches could be completed either in cash or through cheques. However, you don’t need a cheque for an online RTGS transfer.
Disclaimer
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
