What is the Meaning of Real Time Gross Settlement (RTGS)
Gone are the days when bank customers have to wait for "clearing" of the check's, drafts and other instruments sent for clearing. In case of emergency, funds could be transferred much easier now. With the introduction of RTGS, consequent on wide use of technology, in the banking sector, Reserve Bank of India (RBI) introduced what is known as Real Time Gross Settlement (RTGS). RTGS is the fastest possible way of transferring money through normal banking system. There are 4 persons involved in the transaction viz Customer of Bank A, Bank A, Customer of Bank B, and Bank B. Of course through RBI, the transactions are carried out.
About Real Time Gross Settlement System (RTGS)
RTGS is a funds transfer mechanism where money transfer takes place from one bank to another on a real time and gross settlement basis. The meaning of Real time basis means such transactions do not get delayed and the transactions is complete in all respects sooner than they are processed. Gross settlement means the transaction takes place having no "bunching" with any other transaction. How does the money transfer takes place. All banks maintain their accounts with RBI with its Deposit Accounts Department. If Bank "Maharashtra" has to transfer to Bank "Mumbai:" say Rs 25 crores the transaction takes place in the Books of RBI by debiting and crediting the banks involved in the transaction. Once the transaction is processed it is taken as final and irrevocable. So in RTGS transactions are processed continuously throughout the RTGS business hours. Parties involved in the transactions are two banks licensed to function as banks in India. The minimum amount to be remitted under the scheme is Rs 1 lakh and no upper ceiling has been prescribed. The system is primarily meant for transfer of money for high value translations. Now let us see how the transaction reflects in the "depositor"s account in his bank. Under normal circumstances the beneficiary branches are expected to receive the funds in real time and the beneficiary's account has to get credit within two hours of the receipt of message.
How RTGS Transactions System Works
How does the system work ? RBI sends a message to the remitter bank that the money has been credited to the receiving bank. And the customer, in turn, is advised that the money has been delivered to the receiving bank. If for any reason, the beneficiary's account cannot be credited, the receiving bank have to return the money in 2 hours and the reverse transactions take place. The timings for RTGS transactions at RBI is from 9.00 am to 3.00 pm on week days and from 9.00 am to 12 noon on Saturdays. The bank;s charges levied for RTGS transactions has been left to the discretion of the respective banks. However, the charges levied by the various banks are available on www.rbi.org.in
Points to remember to utilize RTGS facility
For transferring money under RTGS, the remitting customer must submit to his bank apart from the amount and his account number, the name of the beneficiary customer and his bank, beneficiary's account number and sender to receiver information, if any. Over and above, the IFSC code of the receiving branch, which is available in the cheque leaf itself has also to be furnished to the remitter banker. The charges levied by the banks for remitting funds under RTGS is Rs,25 per transaction of Rs.1 lakh to Rs. 5 lakh and Rs 50 lakh per transaction for Rs 5 lakh and above The beneficiary, the transation is free.
RBI handles daily on an average 14000 transactions for approximate value of Rs.1,50,000 crore! If you want to know whether a particular bank's branch is RTGS enabled, you can get the list from your bank's branch itself or on the following link: www.rbi.org.in/Scripts/Bs_viewRTGS.aspx. In case of delay or non reedit to the beneficiary account , you may contact the bank/branch. If however, the matter is not resolved, then one can approach the Customer Service Department of RBI at the following address.
The Chief General Manager,
Reserve Bank of India,
Customer Service Department,
1st Floor, Amar Building, Fort,
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