Real Time Gross Settlement or RTGS is a form of electronic fund transfer in which transactions are settled real time. Each transfer is settled individually which means funds are credited immediately to the receiver’s account.
RTGS transfer is usually meant for high value transactions. The minimum transaction limit is Rs. 2 lakhs per transaction. There is no upper limit for the transactions, although individual banks may set limits depending upon the accounts.
RTGS transfers are processed continuously during RTGS business hours. The window for processing such transactions is from 9am to 4:30pm on weekdays and 9am to 2pm on Saturdays for settlement from RBI’s side. However, individual banks are free to set their timings for accepting an RTGS payment.
RTGS transfer is not available at every bank branch. Before opting for an RTGS payment, it is better for the customer to check that his bank branch and the receiver’s bank branch have RTGS facility enabled. A list of bank branches where RTGS is enabled is available on the RBI website.
One important thing to remember about RTGS payment is that RTGS is settled directly in the RBI’s books. This means the transaction is irrevocable and complete. It cannot be reversed.
There are 3 effective ways of using RTGS payment mode:
1. Internet Banking:
2. Before making an RTGS payment it is necessary to add the recipient as a beneficiary. Usually this process takes 30 minutes to register. To register a recipient, the bank account number and the IFSC code has to be input. Most banks send an SMS confirmation when the registration procedure is done. Following the registration, payments can be made. Banks set limits for payments for the first 48 hours after registration, following which there are no such restrictions for RTGS transfers.
Once the beneficiary is added, it is possible to do an RTGS transfer. Some banks send a One Time Password (OTP) as an additional security measure. Once the transaction is verified, the bank processes the RTGS payment.
3. Branch Banking:
In branch banking, the customer has to visit the branch, and fill an RTGS form. The bank checks the details in the RTGS form and then makes the payment.
The information required to make an RTGS payment is:
• Name of beneficiary
• Beneficiary’s bank and branch
• Beneficiary’s account number
• Amount to be remitted
• IFSC code of the branch.
4. Corporate banking:
Many banks have special channels for corporate customers. Corporate banking facilities provide RTGS transfer to corporates along with facilities like cash reporting, payments information etc. RTGS transfer can be done in bulk on these systems.