A Guide to RTGS Meaning, Benefits, Timing, Charges & Limits

24^th Jan 2023...

RTGS meaning in banking: How to do it, timing, charges & limits

One method for settling payments to the receiver instantly and without having to wait a while for the settlement to take place is Real-Time Gross Settlement (RTGS). One must know that once the payments are complete, it is not possible to cancel the RTGS services.

What is RTGS?

Real Time Gross Settlement is what RTGS stands for as we mentioned in the earlier paragraph. It is a technique for transferring money that enables real-time, gross settlement transfers between bank accounts. "Real-time" suggests that RTGS transactions are handled as soon as the sender initiates them, and "gross settlement" denotes that instructions for transferring funds are carried out one-to-one, this is RTGS meaning that one must understand before proceeding with the transactions.

Since these settlements are made throughout the day virtually instantaneously, RTGS lowers total risk. Unlike National Electronic Funds Transfer (NEFT), which makes settlements in batches, this system does not do so. As a result, clients may pay additional fees for the gross real-time cash transfer.

Features & advantages of RTGS

Here is everything you need to know about RTGS money transfers: After Knowing RTGS's meaning, let's examine its characteristics and advantages.

When you choose RTGS through a bank branch, there is no upper restriction on the amount you can transfer.
Real-time fund transfers into the bank accounts of your intended beneficiaries can be started and finished using RTGS money transfer.
Within 30 minutes, the beneficiary receives the fund credits.
To carry out RTGS transactions, you are not required to submit checks or demand draughts.
Your money is protected from theft, loss, and fraudulent beneficiary encashment.
You may start the transfer from any location with internet and mobile banking.
RTGS transactions are endorsed legally by the Reserve Bank of India.

How to do RTGS?

The following lists the steps for transferring money via RTGS:

Step 1: Enter your username and password to sign into your online savings account.

Step 2: Navigate to the homepage and select the Funds Transfer link.

Step 3: Select RTGS and enter beneficiary and payee information, including account number and IFSC code.

Step 4: Review each detail before submitting. The payee's account will be instantly credited with the amount.

RTGS charges

There are no fees associated with RTGS transactions when making transfers online. If the RTGS transaction is carried out at a bank branch, there is a fee of Rs. 15 + GST.

RTGS timings and limits

When understanding the RTGS meaning, you must know that the Transactions are accessible every day and at any time. A 24/7/365 service is provided. It doesn't matter if it's a bank holiday; you can transfer money anytime.

While there is no maximum limit on RTGS transfers set by the RBI, there is a lower limit of INR 2 lakh per transaction. Additionally, you should confirm the upper limitations on RTGS transactions imposed by the bank if you decide to execute an RTGS transfer through internet banking because they can vary from bank to bank.

How much time does RTGS take?

RTGS transactions can be carried out around the clock, except for the cut-off period between 11:30 p.m. and 00:30 a.m.

Final Words

Now that you know the RTGS meaning, you can use it for high-value transactions. You must make sure both the sending and receiving banks are RTGS-enabled bank branches to complete an RTGS transfer effectively. Additionally, remember that RTGS money transfers occur in the RBI's books and that the payments are final and irrevocable. However, we must know that these details are subject to changes in guidelines made by the Reserve Bank of India.

Frequently Asked Questions

Can RTGS be cancelled?

Once an RTGS transaction is completed, it cannot be cancelled.

Are the payments under RTGS final and irreversible?

Yes, payments under RTGS are final and irrevocable as they occur in the RBI's books.

How is processing RTGS different from NEFT?

RTGS processes money transfers in real-time and individually (gross settlement), whereas NEFT processes them in batches.

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.