What is RTGS?

by Joseph K. Clark

If you want to transfer funds to someone across the country, you have many options available to do so. But if you’re going to share a large amount, then you have pretty limited options. One such option is RTGS or Real Time Gross Settlement. It is a fund transfer mechanism that allows real-time processing and settlement of requests for fund transfers. The system ensures the funds reach the receiver immediately after a certain period, as in other payment modes. The territory of the proposal is based on instructions, not batch clearing. The Reserve Bank of India keeps track of all transfers; thus, all successful transfers are irreversible.

What is RTGS? (What is RTGS?)

Real-time gross settlement (RTGS) is an electronic form of fund transfer with real-time transmission. In India, the transfer of funds with RTGS is done for high-value transactions, with a minimum of Rs 2 lakh. The beneficiary receives the money transferred on a real-time basis. The main difference between RTGS and National Electronic Funds Transfer (NEFT) is that the transfer through NEFT takes place in batches. In RTGS, transactions are executed individually and on a gross basis.

The customer initiating a funds transfer through RTGS should have the Indian Financial System Code (IFSC) of the beneficiary’s bank and the beneficiary’s name, account number, and bank name. To initiate and receive bank branches, the transaction must be RTGS-enabled. Customers with Internet banking accounts can do RTGS transactions on their own.


History of RTGS (History of RTGS?)

The first system, similar to the RTGS system, was the US Fedwire system launched in 1970. The plan evolved the previous telegraph-based system, which electronically transferred funds between US Federal Reserve banks. In 1984, the United Kingdom and France implemented the RTGS-type system.

By 1985, three central banks had implemented the RTGS system, while by the end of 2005, the RTGS system was implemented by 90 major banks.

How RTGS Works

Real-time gross settlement is a system commonly used for large-value interbank fund transfers. These often require immediate and complete clearing and are usually conducted by a country’s central bank.

Real-time gross settlement minimizes settlement risk, as interbank settlement typically occurs in real-time throughout the day – rather than at the end of the day altogether. This eliminates the risk of a lag in completing the transaction. (Settlement risk is often called Delivery Risk.) RTGS can usually charge higher fees than bundled and net payment procedures.

Limitations of RTGS

According to the Reserve Bank of India, individuals can request RTGS from 9 am to 4:30 pm. But on Saturday, the time varies slightly; it is available from 9 am to 2 pm. It provides time for RBI transactions. However, the actual time offered by banks may vary.

Saying that there are no upper limit restrictions on RTGS-based fund transfers. RTGS is mainly designed for large-value fund transfers. Per the rules and regulations set by the Reserve Bank of India, you cannot initiate an RTGS request (Request) for transactions below Rs. 2 lakhs.


RTGS allows you to transfer money to any person in any part of the country. There are some changes in the fund transfer mechanism that you will have to pay to initiate an RTGS request. For all fund transfer requests between Rs.2 lakhs and Rs.5 lakhs, banks can charge a maximum of Rs.30 per transaction from their customers. For transactions above Rs.5, RBI has a fixed Rs.55 per transaction.


To initiate an RTGS request, you have to submit some details to your bank or branch. These details include beneficiary name, amount to be sent, beneficiary account number, sender account number, contact information if needed, and IFSC code. For online RTGS services, websites usually have an IFSC locator so that you can search for the same. You can also visit the RBI website to get the list of branches and their IFSC code. Once you fill out the RTGS form with these details, you can fulfill the RTGS request (Request). Also, you cannot request RTGS from any bank or branch in the country. The unit must be part of the RTGS network or have RTGS enabled to process the request. The RBI website lists all banks that are allowed with RTGS facilities.

Individuals with bank accounts can quickly request RTGS payments at a branch or through net banking. Many banks provide online RTGS services to their customers to make the transfer hassle-free.

Average time for transfer and receipt of ( Usual time for transfer and Acknowledgement)

The RTGS arrangement ensures that the fund transfer is close to immediate. Sometimes it can take a few minutes, depending on certain factors. RBI mandates the branch on receivers to credit the amount in the account within 30 minutes of receiving the funds. These days most banks provide information to their customers via SMS or email after coming to RTGS. Thus, you can expect from the bank that you will notice it when the amount is deposited in the beneficiary’s account. Some banks provide the ability to track the status of RTGS through their website or net banking facility.

Is there a possibility of failure? ( Are there any chances of failure?)

RTGS is only a different method of fund transfer; there are some situations where requests may fail. Passive or frozen receiver accounts are the most common culprits behind RTGS request failure. In such a situation, the amount will be returned to the account and the sender’s account. This usually occurs within one hour of the requestor by the end of the RTGS working day. The refund is there in case of failures; you don’t have to worry about anything. But in extreme cases, the beneficiary does not receive the money within the stipulated time.

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