Real-time gross settlement


The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous real-time settlement of funds individually on an order by order basis without netting. Is there any way that a remitting customer can track the remittance transaction?

Is there any minimum / maximum amount stipulation for RTGS transactions done on ICICIBank.com?


RTGS systems are usually operated by a country's central bank as it is seen as a critical infrastructure for a country's economy. Economists believe that an efficient national payment system reduces the cost of exchanging goods and services , and is indispensable to the functioning of the interbank, money, and capital markets.

A weak payment system may severely drag on the stability and developmental capacity of a national economy; its failures can result in inefficient use of financial resources, inequitable risk-sharing among agents, actual losses for participants, and loss of confidence in the financial system and in the very use of money.

RTGS system does not require any physical exchange of money; the central bank makes adjustments in the electronic accounts of Bank A and Bank B, reducing the balance in Bank A's account by the amount in question and increasing the balance of Bank B's account by the same amount.

The RTGS system is suited for low-volume, high-value transactions. It lowers settlement risk, besides giving an accurate picture of an institution's account at any point of time. The objective of RTGS systems by central banks throughout the world is to minimize risk in high-value electronic payment settlement systems. In an RTGS system, transactions are settled across accounts held at a central bank on a continuous gross basis. Settlement is immediate, final and irrevocable.

Credit risks due to settlement lags are eliminated. RTGS systems are an alternative to systems of settling transactions at the end of the day, also known as the net settlement system, such as the BACS system in the United Kingdom. In a net settlement system, all the inter-institution transactions during the day are accumulated, and at the end of the day, the central bank adjusts the accounts of the institutions by the net amounts of these transactions.

The World Bank has been paying increasing attention to payment system development as a key component of the financial infrastructure of a country, and has provided various forms of assistance to over countries.

Most of the RTGS systems in place are secure and have been designed around international standards and best practices. There are several reasons for central banks to adopt RTGS. RTGS is the fastest possible interbank money transfer facility available through secure banking channels in India.

Fund transfer transactions are settled in batches as opposed to the continuous, individual settlement in RTGS. The above mentioned facilities are available to both Retail and Corporate Internet Banking users of SBI provided they have availed transaction rights. Under normal circumstances the beneficiary Bank branch receives 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 two hours of receiving the funds transfer message.

As stated above, NEFT operates in half hourly batches. Currently there are twenty three settlements from 8 am to 7 pm on all working days including working Saturdays. Therefore, the beneficiary can expect to get the credit for the transactions put through between 8 am to 5. For transactions settled in the 6. If an RTGS transaction is not credited to the beneficiary account, does the remitter get back the money? If the beneficiary's bank is unable to credit the beneficiary's account for any reason, the former will return the money to the remitting bank within 2 hours.

Once the amount is received by the remitting bank, it is credited to the remitter's account by the branch concerned. If an NEFT transaction is not credited to a beneficiary account, does the Remitter get back the money?

If the beneficiary's bank is unable to credit the beneficiary's account for any reason, the former will return the money to the remitting bank within 2 hours of completion of the batch in which the transaction was processed. There is no upper ceiling for RTGS transactions. 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 two hours of receiving the funds transfer message. Would the remitting customer receive an acknowledgment 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 that money has been delivered to the receiving bank.

Would the remitting customer get back the money if it is not credited to the beneficiary's account? It is expected that the receiving bank will credit the account of the beneficiary instantly.

If the money cannot be credited for any reason, the receiving bank would have to return the money to the remitting bank within 2 hours. Once the money is received back by the remitting bank, the original debit entry in the customer's account is reversed.

Till what time RTGS service window is available? The RTGS service window for customer's transactions is available from 9. However, the timings that the banks follow may vary depending on the customer timings of the bank branches. With a view to rationalize the service charges levied by banks for offering various electronic products, a broad framework has been mandated as under: 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 effecting a RTGS remittance: How would one know the IFSC code of the receiving branch? The beneficiary customer can obtain the IFSC code from his bank branch.