What is RTGS funds transfer system?

Real Time Gross Settlement or RTGS is a funds transfer mechanism where transfer of money takes place from one bank to another on a “real time” and on “gross” basis. The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is 2 lakh rupees with no upper limit.

Settlement in “real time” means the transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. “Gross settlement” means the transaction is settled on one to one basis without bunching with any other transaction. 

Considering that money transfer takes place in the books of the Reserve Bank of India, the payment is taken as final and irrevocable.

RTGS transfer system is available on all days of the year. The transaction charges have been capped by RBI.

In the NEFT system, the transactions received up to a particular time are processed in batches. But in RTGS, the transactions are processed continuously on a transaction by transaction basis throughout the day.

The remitting customer has to furnish the following information to a bank for initiating an RTGS remittance.

Extreme care should be exercised in providing the account number of the beneficiary, as, during processing RTGS transactions, the credit will be given to the customer’s account solely based on the account number provided in the RTGS remittance instruction.

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 must credit the beneficiary's account within 30 minutes of receiving the funds transfer message.

While the customers do not have the facility to track an RTGS transaction, the RBI has implemented the feature of positive confirmation. Under this, the remitting bank would receive a message from RBI, through the beneficiary bank, that the money has been credited to the beneficiary bank/customer account.

Based on this, the remitting bank should advise the remitting customer that money has been credited to the receiving bank’s beneficiary account.

In case of non-credit or delay in credit to the beneficiary account, the customer can contact his or her bank. If the issue is not resolved satisfactorily, a complaint can be lodged with the RBI, giving the Unique Transaction Reference (UTR) number, which is a 22 character code used to uniquely identify a transaction in the RTGS system.

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