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RTGS full form: Real Time Gross Settlement explained
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RTGS stands for Real Time Gross Settlement. It is the RBI's system for moving large sums between banks, where each payment is settled individually (gross) and immediately (real time) in the books of the RBI. Once a payment is sent, it is final and irrevocable. RTGS began on 26 March 2004 with a handful of banks, and since 14 December 2020 it has run 24 hours a day, every day.
What "real time" and "gross" mean
- Real time: the payment is processed as soon as the instruction is received. It is not held back for a batch.
- Gross: every transaction is settled on its own. It is not netted against others, as happens in NEFT.
Settling one by one means the receiving bank never extends credit before it has real money, which removes settlement risk. That is why the RBI uses it for high-value payments, and why banks use it for interbank deals as well as customer payments.
Key rules
- Minimum amount: ₹2 lakh per transaction, with no upper cap fixed by the RBI (banks may have internal ceilings). This has held since RTGS began; confirm any change at rbi.org.in.
- Details needed: beneficiary name, account number and IFSC.
- Reference: each transfer gets a unique transaction reference (UTR) number that both banks can use to trace it.
- Credit and return: the beneficiary bank is expected to credit the account within about 30 minutes of receiving the message, and if it cannot, to return the money to the sender promptly (RBI rules, rbi.org.in).
Example
A trader in Coimbatore pays ₹18 lakh to a supplier in Pune. She uses RTGS at the bank's net banking page, enters the supplier's account and IFSC, and the supplier's account is credited within minutes. If she needed to send ₹1.5 lakh, RTGS would not accept it because it is below the minimum, so she would use NEFT, IMPS or UPI.
How bank exams ask about it
Look for "RTGS stands for", "minimum amount for RTGS", "which system settles each payment individually", and "RTGS is operated by". The trap pairs it with NEFT: NEFT has no minimum and works in batches; RTGS has a minimum and settles instantly. See the rest of the payment systems list in banking awareness.
Where to check
Rules, timings and charges are on the RBI's payment systems pages at rbi.org.in.
Frequently asked questions
Can I reverse an RTGS payment?
No. It is irrevocable once sent. If it went to the wrong account, ask your bank to request a return from the beneficiary's bank.
Is RTGS faster than UPI?
Both are fast. RTGS suits large amounts between banks; UPI suits everyday payments.
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