RTGS is an abbreviated form of “Real Time Gross Settlement” which is a funds transfer mechanism characterised by money transfer from one bank toanother in real time and on gross basis. It is regarded as the fastest possible moneytransfer system through the banking channel. The real time refers to the payment transaction happening at that moment without any waiting period. Thus, it implies that transactions aresettled as quickly as they are processed.
“Gross settlement” refers to the transaction that getssettled on one to one basis and it does not get clubbed with any other transaction. The transaction is regarded as final and irreversible as money transfer takes place in books of RBI. All the bank branches in India do not support RTGS transactions. As per latest data published by RBI, there are over 74,000 RTGS enabled bank branches in India. One can see the list of RTGS enabled bank branches on RBI website.
The RTGS system is meant for high value transactions with minimum amount permissible for remittance is Rs 2 lakh. There is no upper ceiling forRTGStransactions. As a result of successful RTGS transaction, the beneficiary branches receive the amount in real time as soon as it is transferred by the remitting bank. Thebeneficiary bank is required to credit the transferred funds into the beneficiary’s account within two hours of receivingthe funds.
Timings of RTGS transfer
Customers can transfer funds through RTGS from 9.00 hoursto 16.30 hours on week days. The timing for Saturday is from 9.00 hours to 13.30 noon. Similarly timings for accepting the customer transactions for settlement at the RBI is between 9.00 hours to15.00 hours on week days and from 9.00 hours to 12.00 noon on Saturday.
The service window for inter-bank transactionsis open from 9.00 hours to 17.00 hours during week days and between 9.00 hours to 14.00hours on Saturdays.
In order to transfer money by RTGS transfer, the remitting customer is required to produce the following information.
The IFSC code of the receiving branch
Remitting Customer’s Account number which is to be debited
Amount to be remitted
Name of the beneficiary bank
Name and Account number of the beneficiary customer
Sender to receiver information
The beneficiary customer can receive the IFSC code from his bank branch and it is also printed on the cheque leaf. Before the transaction, remitting customer can get IFSC code number and bank branch from the beneficiary. RBI has also made available the list of IFSC codes on its website.
The following charges are applied for inward and outward transaction through RTGS.
Inward transactions – It is absolutely free and there are no charges applied
2 lakh to 5 lakh – Not exceeding Rs 25 per transaction
Above 5 lakh – Not exceeding Rs 50 per transaction