RTGS (Real Time Gross Settlement)
Reserve Bank of India has initiated many changes in the Payment and Settlement Systems. In this information age, time is a key competency on which every body is competing. The same is true for every banking customer. Hence payment systems like RTGS ensure quick settlement of transactions in earliest possible time.
Normally a customer has many queries about RTGS. We are enclosing series of FAQs which shall make the understanding of RTGS simpler.
Q.1 What is RTGS System?
The acronym ‘RTGS’ stand for Real Time Gross Settlement. RTGS system is a funds transfer mechanism where transfer of money takes place from one bank to another on a ‘real time’ and on ‘gross’ basis. This is the fastest possible money transfer system through the banking channel. Settlement in ‘real time’ means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed.’ Gross settlement’ means the transaction is settled on one to one basis without bunching with any other transaction. Considering that money transfer takes place in the books of the Reserve Bank of India, the payment is taken as final and irrevocable.
Q.2 Is there any minimum / maximum amount stipulation for RTGS transactions?
The RTGS system is primarily for large value transactions. The minimum amount to be remitted through RTGS is ` 2 lakh. There is no upper ceiling for RTGS transactions.
Q.3 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.
Q.4 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.
Q.5 Would the remitting customer get back the money if it is not credited to the beneficiary’s account? When?
Yes. 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.
Q.6 Till what time RTGS service window is available?
The RTGS service window for customer’s transactions is available from 9.00 hours to 15.30 hours on week days and from 9.00 hours to 12.30 noon 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.
Q.7 What about processing charges / service charges for RTGS transactions?
With a view to rationalize the service charges levied by banks for offering various electronic products, 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 ` 25 + Service Tax per transaction.
` 5 lakh and above – not exceeding ` 50 + Service Tax per transaction
Q.8 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 RTGS remittance:
1. Amount to be remitted
2. His/her account number which is to be debited.
3. Name of the beneficiary bank
4. Name of the beneficiary customer
5. Account number of the beneficiary customer
6. Sender to receiver information, if any
7. The IFSC code number of the receiving branch
Q.9 How would one know the IFSC code of the receiving branch?
The beneficiary customer can obtain the IFSC code from his branch. The IFSC code is also available in the cheque leaf. This code number and bank branch details can be communicated by the beneficiary to the remitting customer.
Q.10 Do all bank branches in India provide RTGS service?
No, all the bank branches in India are not RTGS enabled. As on August 2011 more than 78800 (27.08.2011) bank branches of 126 Banks are RTGS enabled. The list of such branches is available on RBI website www.rbi.org.in/Scripts/BsviewRTGS.aspx
Q.11 Is there any way that a remitting customer can track the remittance transaction?
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 by a short message on the mobile.