RTGS: Everything you need to know about real-time gross settlement funds transfer

RTGS stands for real-time gross settlement. Under the RTGS system, funds are transferred instantly from your account to the account of the beneficiary, as soon as you issue the instructions.

What is RTGS?

According to the RBI, RTGS is a system where there is a continuous and real-time settlement of funds, individually, on a transaction-by-transaction basis, without netting’.

Real-time settlement of funds means money is transferred from the source to the receiver as soon as the instruction is issued. There is no waiting period in this transaction. In short, RTGS transfers are used for fund transfers that require immediate clearance.

Meant for high-value fund transfers, RTGS enables fund transfers on a transaction-by-transaction basis, i.e., multiple transactions are not grouped.

In India, the RTGS system is run and managed by the Reserve Bank of India (RBI). Since RTGS transfers find a mention in the books of the RBI, they are irrevocable and final.

RTGS benefits

• Safe and secure fund transfer.
• No capping of amount transfer (The account holder can set his/her own funds-transfer limit).
• Available all day, every day.
• Real-time transfer of funds.
• No need for a physical visit or paper.

RTGS processing fee

From July 01, 2019, processing charges for inward RTGS transactions have been waived. However, on money sent outside, the RTGS charges are as follows:

• Rs 2 lakhs to Rs 5 lakhs: Up to Rs 24.50
• Over Rs 5 lakhs: Up to Rs 49.50

Details to be provided for RTGS

• Amount
• Source account number
• Name of beneficiary
• Account number of beneficiary
• Name of the beneficiary bank, branch, and IFSC code
• Sender to receiver information, if any.

Time is taken in RTGS transfer

It takes nearly 30 seconds for the funds to reach the account of the beneficiary if the money has been transferred through RTGS. In case of any failure, the money transferred returns to the source within one hour. If there is any delay in refund, the customer is eligible to receive compensation at the current repo rate plus 2%.

Preconditions for RTGS transfer

For an RTGS transfer to take place, both, the sending bank branch and the receiving bank branch must have the RTGS facility enabled. According to the RBI data, there are over 1,65,000 RTGS-enabled bank branches in India at present.

The sender must also have the beneficiary’s name, account number, account type, bank branch name, and the IFSC.

How to initiate an RTGS transaction?

You can initiate an RTGS transfer through online and offline modes. For offline mode, you will have to visit your bank branch and issue the instructions. To do so online, you can use mobile banking or internet banking facilities.

Precautions to take before RTGS transfer

• RTGS transactions take place solely based on the account number of the beneficiary. Make sure you input the right account number.
• RTGS system does not accept post-dated transactions.

How to track RTGS transfers?

Customers do not have any facility to track an RTGS transaction. However, the beneficiary bank sends a message to the receiving bank through RBI that the money has been credited to the beneficiary account. The sender can get in touch with his bank to get this information.