Real-Time Gross Settlement or RTGS is a money transfer facility offered by banks. It involves a continuous and real-time settlement of fund transfers.
Real-time in RTGS refers to the processing of instructions at the time they are received while gross settlement refers to the settlement of funds transfer instructions individually.
What is the difference between RTGS and NEFT?
Bank customers often confuse between RTGS and the National Electronic Funds Transfer (NEFT) which is another fund transfer facility. However, the two are different. In NEFT, the transactions received at a particular time are processed in batches. But in RTGC, the transactions are processed continuously throughout the day. The RTGS facility is available 24x7 from December 14.
What is the processing fee in RTGS?
The Reserve Bank of India (RBI) has waived the processing charges levied on RTGS transactions.
Below is the broad framework of charges levied by banks for RTGS facility.
> On inward transactions: It is free, that is, no charge is imposed.
> On outward transactions: Charges not exceeding Rs 24.5 for transactions between Rs 2 lakh and Rs 5 lakh (exclusive of tax, if any). Charges not exceeding Rs 49.5 for transactions above Rs 5 lakh (exclusive of tax, if any)
Banks can charge a lower rate, but not more than the rates prescribed by RBI.What other details are required for RTGS remittance?
- sender to receiver information, if any.
What are the benefits of RTGS fund transfer?
Over the other modes of funds transfer, the RTGS can offer you many benefits. It is a safer, more secure system and has no cap on the amount of transfer. Also, the RTGS facility is available on all days 24x7.Using internet banking, you can initiate the remittances where you don't have to use a physical cheque or a demand draft. On the other hand, the beneficiary also need not have to visit a bank branch for depositing the paper instruments. RBI has capped the transactional charges and have legal backing.