RTGS system for funds transfer to be available 24x7 from December: RBI | Here's what you should know
New Delhi | Jagran Business Desk: While announcing the status quo on key lending rates -- repo rate and reserve repo rate -- Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that the Real-time Gross Settlement (RTGS) system of transferring funds will remain available 24x7 from December this year. At present, the transfer facility is available only during the working hours of the bank.
"In December 2019, the RBI made available the National Electronic Funds Transfer (NEFT) system on a 24x7x365 basis and the system has been operating smoothly since then. In order to facilitate swift and seamless payments in real-time for domestic businesses and institutions, it has been decided to make available the RTGS system round the clock on all days from December 2020," the RBI chief said.
"India will be among very few countries globally with a 24x7x365 large value real-time payment system. This will facilitate innovations in the large value payments ecosystem and promote ease of doing business," he added.
In the RTGS system, the beneficiary bank branch receives the money in real-time as soon as the funds are transferred by the remitting bank. The bank on the receiving end has to credit the money in the beneficiary's account within two hours of receiving the funds' transfer message.
The Reserve Bank of India maintains two fund transfer systems in India; the National Electronic Funds Transfer (NEFT) and RTGS (real-time gross settlement). These two systems help in Inter Bank Transfer, which enables electronic transfer of funds from the remitter's account in one bank to the beneficiary's account in any other bank. The National electronic funds' transfer (NEFT), a retail payment system operated by the RBI, became a 24x7 facility from last year.
Here is all you need to know:
- RTGS is a safe and secure system for funds transfer and has no amount cap.
- The payments done through RTGS are final and irrevocable as it takes place in the books of RBI.
- As of now, RTGS is not a 24x7 system. The RTGS service window for customer transactions is available to banks from 7 am to 6 pm on a working day, for settlement at the RBI end.
- The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is Rs 2,00,000 with no upper or maximum ceiling.
- NEFT is an electronic fund transfer system in which the transactions received up to a particular time are processed in batches, while in RTGS, the transactions are processed continuously on a transaction by transaction basis throughout the RTGS business hours.
Posted By: Talib Khan