The Reserve Bank of India (RBI) will allow the transfer of funds through Real Time Gross Settlement System' (RTGS) round the clock from Monday, 14 December – becoming one of the few countries in the world to allow the 24*7 facility.
What is the change? Why do businesses prefer this? Here’s what you need to know.
What is the RTGS system?
RTGS stands for RealTime Gross Settlement system. It is a transfer system wherein the transfer of money from one bank to any another takes place on a 'real time’ basis. This means, instructions for fund transfer happens on one-to-one basis and each transaction is facilitated individually by the RBI.
This is typically used for transactions of a higher value. The minimum amount to be remitted through RTGS is Rs 2,00,000.
What is the change?
The RTGS transaction facility was available for customers from 7:00 am to 6:00 pm on all working days of a week, except the second and fourth Saturdays of the month. However, with this change, the RTGS facility will be available throughout the day – except for the interval between ‘end-of-day’ and ‘start-of-day’ processes – essentially between 12 and 12:30.
What is the advantage of this change?
Explaining the significance of the move, the RBI, in a statement, said:
“Round the clock availability of RTGS will provide extended flexibility to businesses for effecting payments and will enable introduction of additional settlement cycles in ancillary payment systems.”
"This can also be leveraged to enhance operations of Indian financial markets and cross-border payments,” it added.
How to avail the RTGS service?
It can be availed through internet/online banking, as well as offline by depositing cash. However, the 24*7 service will be available only online.
What details do I require to make RTGS transaction?
- Transaction amount
- Account number
- Account details and name of the beneficiary
- The IFSC code of the receiving branch
Why do businesses prefer RTGS?
- Safe mode of transaction money
- No cap on the amount transferred
- There are no additional charges on transactions
- These transactions have legal backing
When did the system of RTGS payments begin in India?
The RTGS began its operations on 26 March 2004 with a soft launch involving four banks. However, the system presently handles 6.35 lakh transactions daily for a value of Rs 4.17 lakh crore across 237 participant banks.
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