RTGS System – FAQ (Its Useful to Understand the Concept Clearly)
RTGS System – FAQ – Under Payment and Settlement Systems
FAQ Based Explanations for RTGS Systems its useful to Understand the Concept Clearly.
About Payment and Settlement Systems
Payment and settlement systems play an important role in improving overall economic efficiency. They consist of all the diverse arrangements that we use to systematically transfer money-currency, paper instruments such as cheques, and various electronic channels.
1. What is RTGS System?
The acronym ‘RTGS’ stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting). ‘Real Time’ means the processing of instructions at the time they are received rather than at some later time; ‘Gross Settlement’ means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable.
2. How RTGS is different from National Electronics Funds Transfer System (NEFT)?
NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes place with all transactions received till the particular cut-off time. These transactions are netted (payable and receivables) in NEFT whereas in RTGS the transactions are settled individually. For example, currently, NEFT operates in hourly batches. [There are twelve settlements from 8 am to 7 pm on week days and six settlements from 8 am to 1 pm on Saturdays.] Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time Contrary to this, in the RTGS transactions are processed continuously throughout the RTGS business hours.
3. Is there any minimum / maximum amount stipulation for RTGS transactions?
The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is ` 2 lakh. There is no upper ceiling for RTGS transactions.
4. What is the time taken for effecting funds transfer from one account to another under RTGS?
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 has to credit the beneficiary’s account within 30 minutes of receiving the funds transfer message.
5. Would the remitting customer receive an acknowledgement of money credited to the beneficiary’s account?
The remitting bank receives a message from the Reserve Bank that money has been credited to the receiving bank. Based on this the remitting bank can advise the remitting customer through SMS that money has been credited to the receiving bank.
6. Would the remitting customer get back the money if it is not credited to the beneficiary’s account? When?
Yes. Funds, received by a RTGS member for the credit to a beneficiary customer’s account, will be returned to the originating RTGS member within one hour of the receipt of the payment at the PI of the recipient bank or before the end of the RTGS Business day, whichever is earlier, if it is not possible to credit the funds to the beneficiary customer’s account for any reason e.g. account does not exist, account frozen, etc. Once the money is received back by the remitting bank, the original debit entry in the customer’s account is reversed.
7. Till what time RTGS service window is available?
The RTGS service window for customer’s transactions is available to banks from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 14:00 hours on Saturdays for settlement at the RBI end. However, the timings that the banks follow may vary depending on the customer timings of the bank branches.
8. What about Processing Charges / Service Charges for RTGS transactions?
Ans With a view to rationalize the service charges levied by banks for offering funds transfer through RTGS system, a broad framework has been mandated as under:
a) Inward transactions – Free, no charge to be levied.
b) Outward transactions – ` 2 lakh to ` 5 lakh – not exceeding ` 30.00 per transaction;
Above ` 5 lakh – not exceeding ` 55.00 per transaction.
9. What is the essential information that the remitting customer would have to furnish to a bank for the remittance to be effected?
The remitting customer has to furnish the following information to a bank for initiating a RTGS remittance:
- Amount to be remitted
- Remitting customer’s account number which is to be debited
- Name of the beneficiary bank and branch
- The IFSC Number of the receiving branch
- Name of the beneficiary customer
- Account number of the beneficiary customer
- Sender to receiver information, if any
10. How would one know the IFSC number of the receiving branch?
The beneficiary customer can obtain the IFSC code from his bank branch. The IFSC code is also available on the cheque leaf. The list of IFSCs is also available on the RBI website. This code number and bank branch details can be communicated by the beneficiary to the remitting customer.
11. Do all bank branches in India provide RTGS service?
No. All the bank branches in India are not RTGS enabled. Presently, there are more than 100,000 RTGS enabled bank branches.
12. Is there any way that a remitting customer can track the remittance transaction?
Ans It would depend on the arrangement between the remitting customer and the remitting bank. Some banks with internet banking facility provide this service. Once the funds are credited to the account of the beneficiary bank, the remitting customer gets a confirmation from his bank either by an e-mail or SMS. Customer may also contact RTGS / NEFT Customer Facilitaion Centers of the banks, for tracking a transaction.
13. Whom do I can contact, in case of non-credit or delay in credit to the beneficiary account?
Contact your bank / branch. If the issue is not resolved satisfactorily, complaint may be lodged to the Customer Service Department of RBI at –
The Chief General Manager
Reserve Bank of India
Customer Service Department
1st Floor, Amar Building, Fort
Mumbai – 400 001
Or send email
14. How can a remitting customer know whether the bank branch of the beneficiary accepts remittance through RTGS?
For a funds transfer to go through RTGS, both the sending bank branch and the receiving bank branch would have to be RTGS enabled. The lists are readily available at all RTGS enabled branches. Besides, the information is available at RBI website. Considering that more than 110,000 branches at more than 30,000 cities / towns / taluka places are covered under the RTGS system, getting this information would not be difficult.