RTGS payment: RTGS to be available 24x7x365 from Dec 2020

The Reserve Bank of India (RBI) in its Statement on Development and Regulatory Policies has announced that the money transfer facility, RTGS, will be available round the clock, 24 hours a day, 7 days a week from December 2020. Under the current rules, the transfers can be made between 7 AM and 6 PM on all working days except for the second and fourth Saturday of the month and on Sundays.

The announcement comes after the RBI made the NEFT facility available 24X7 from December 16, 2019.

In its statement the central bank said, “In December 2019, the National Electronic Funds Transfer (NEFT) system was made available on a 24x7x365 basis and the system has been operating smoothly since then. The large-value RTGS system is currently available for customers from 7.00 am to 6.00 pm on all working days of a week (except 2nd and 4th Saturdays of the month). To support the ongoing efforts aimed at global integration of Indian financial markets, facilitate India’s efforts to develop international financial centers and to provide wider payment flexibility to domestic corporates and institutions, it has been decided to make available the RTGS system round the clock on all days. With this, India will be one of the very few countries globally with a 24x7x365 large value real time payment system. This facility will be made effective from December 2020.”

What is RTGS?

RTGS stands for Real Time Gross Settlement. The facility is used to transfer large money sums from one bank account to another. As per the RBI’s FAQs, the minimum amount that can be remitted through RTGS is Rs 2 lakh with no upper or maximum ceiling. However, banks usually have an upper ceiling of Rs 10 lakh.

Though the NEFT facility is free of cost, there maybe charges levied on making an RTGS transfer. These charges vary from bank to bank. As per the RBI FAQs dated October 30, 2019, “With effect from July 01, 2019, the Reserve Bank has waived the processing charges levied by it for RTGS transactions. Banks may pass on the benefit to its customers.” Thus, there are no charges on the money credited into your bank account.

According to the RBI, iIn case of outward transactions or debit transactions, the maximum charges cannot exceed:

  • Rs 2 lakh to Rs 5 lakh: not exceeding Rs 24.50 (exclusive of tax, if any)
  • Above Rs 5 lakh: not exceeding Rs 49.50 (exclusive of tax, if any)

Banks may decide to charge a lower rate but cannot charge more than the rates prescribed by RBI.

How does RTGS transfer work?

Under the scheme, there is continuous and real-time settlement of fund transfers individually on a transaction by transaction basis. ‘Real Time’ means the processing of instructions at the time they are received; ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs individually. This is unlike the NEFT where the transfers are made in batches.

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