On Wednesday, the Reserve Bank of India (RBI) announced that on Wednesday announced that the Real Time Gross Settlement System (RTGS) will be operational 24x7 from 00:30 hours 14 December 2020. The move is expected to bring flexibility to businesses and enhance the country's financial markets, the central bank said.
"Round the clock availability of RTGS will provide extended flexibility to businesses for effecting payments and will enable introduction of additional settlement cycles in ancillary payment systems. This can also be leveraged to enhance operations of Indian financial markets and cross-border payments," RBI said.
"India will become one of the few countries in the world to operate its RTGS system round the clock throughout the year," it added in its statement.
What is RTGS?
- Real-Time Gross Settlement System (RTGS) is primarily meant for high-value transactions.
- The minimum amount to be remitted through RTGS is Rs 2 lakh. There is no maximum limit.
- Currently, RTGS is available for customers from 7 am to 6 pm on all working days of a week, except the second and fourth Saturdays of every month.
- The began its operations on 26 March 2004 with a soft launch involving four banks, presently handles 6.35 lakh transactions daily for a value of Rs 4.17 lakh crore across 237 participant banks.
- The average ticket size for RTGS in November 2020 was Rs 57.96 lakh, as per RBI's statement, making it a truly large value payment system.
- RTGS uses ISO 20022 format which is the best-in-class messaging standard for financial transactions.
- The feature of positive confirmation for credit to beneficiary accounts is also available in RTGS.
- In this transfer, which happens in real-time, the beneficiary bank receives the instruction to transfer funds immediately when you carry out the transaction, and the transfer is instantaneous.
- RBI stopped
- From July 2019, RBI stopped levying transactional charges on transfers through NEFT and RTGS, with an aim to promote digital transactions in the country.