In this article we will discuss the technical aspects of the RTGS facility in online banking and understand its benefits
India has a cultural ethos of preferring transacting through cash rather than through digital platforms. It helped keep things off the record and besides there was a general scepticism towards digital transactions because of the chances of errors and failures. The system had not yet proven to be fool proof.
As far as keeping things off the records goes, various government initiatives and policies have made it difficult to make cash transactions without attracting the attention of authorities. And with the leaps that have been made as far as technology is concerned, the system for making online transactions has been almost perfected. Even the time lags and delays in making online transfers have now been cut down through better security and authentication controls. One such feature that enables seamless online transactions is the Real-Time Gross Settlement more commonly known as RTGS.
RTGS is one of the easiest ways to make fund transactions. Real-Time Gross Settlement (RTGS) was launched in 2004. It is an electronic way of fund transfer where the transfer of money takes place from one bank to another bank on a real-time and gross basis. In this article we will be discussing in detail the various features of RTGS and the various regulations around it.
RBI Mediation
The Reserve Bank of India monitors and manages the RTGS transactions by providing efficient and faster fund transfer among the banks facilitating their financial operations. Hence, RTGS is the constant method of settling payments on an individual line basis without netting debits with credits over the books of a central bank (e.g. bundling transactions). Once created, real-time gross settlement returns are final and conclusive making them reliable and fast.
What Is RTGS Fund Transfer?
RTGS is a system that allows continuous real-time fund transfers; something that used to take 24 hours or more prior to the introduction of RTGS. Further, ‘real-time’ indicates that the information is treated at the very moment when they are received rather than any sort of delay. ‘Gross-settlement’ indicates the fund transfer instructions will be managed on an instruction by instruction basis.
This money transfer system is meant for a large value of transactions. The Reserve Bank of India has suspended the charges for RTGS transactions only to increase the demand between the citizens. Around 1,40,000 bank branches or departments are RTGS-enabled in the country.
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Advantages of Real-Time Gross Settlement
- It is a secure and safe way of transferring funds.
- There is no maximum limit for RTGS transfers from the branch.
- Further, you can make a real-time fund transfer to the beneficiary account.
- You can transfer funds on all days.
- Moreover, for an electronic fund transfer, there is no likelihood of theft or loss of the fraudulent encashment for beneficiaries.
- Further, no requirement for a physical cheque or demand draft.
- RTGS transactions have legal support.
- The transaction can be received from his/her workplace/home doing internet banking.
- Funds can be carried without any charges or fees.
Requirements To Make An RTGS Transactions
Here are some information required while starting an RTGS transfer:
- Remitting account details.
- Name of the beneficiary customer.
- Amount to be transferred.
- Beneficiary account number.
- Name of the beneficiary bank and branch.
- IFSC code of the receiving bank.
- Comments, remarks or notes if any.
How To Make RTGS Fund Transfer In SBI?
Let’s have a look at the RTGS transfer from SBI online transaction. If you want to make RTGS payment through net banking, follow the below steps for the online process:
- Log in to the SBI net banking account utilising your password and customer ID.
- Below the tab for transactions, find the option for fund transfer either within SBI or to other bank accounts.
- Now select on RTGS
- Further, select your beneficiary account and the bank account. All the information will appear on the display then enter the amount you need to transfer.
- Additionally, click on “Submit” after selecting the details and approve the payment with the help of OTP to finish the payment.
- Once you complete the authorising details, you will get an SMS or message regarding the RTGS payment. If you access the correct information, your RTGS payment will be successful.
How Many Methods Are Available To Perform RTGS?
There are two methods to implement RTGS payment:
- Bank Branch: This involves visiting the nearest bank branch and filling out the RTGS form to start a fund transfer.
- Internet banking: Many banks allow the ability to add beneficiaries online using internet banking activity. Upon strongly adding beneficiaries, you can carry funds to the beneficiary. In addition to people, business or corporate account holders can also use internet banking to perform RTGS transactions.
RTGS Duration Of Service Availability
RTGS payment transactions will be forwarded to RBI based on the following schedule:
| Day | Start Time | End Time |
| Monday to Friday | 9:00 am | 4:00 pm |
| Saturday | 9:00 am | 1:30 pm |
Note: The RTGS transactions will have some difference in the transaction processing time across various banks.
Limit For RTGS Transactions
| Type | Minimum | Maximum |
| RTGS | Rs.2 lakh | No limit |
Note: The maximum amount will differ based on the banks.
Processing Charges
The processing service or charges for RTGS transactions are tabulated below:
| Type | Amount | Service Charge |
| RTGS | From Rs.2 lakh up to Rs.5 lakh | Not exceeding Rs.30/- |
| From Rs.5 lakh and above | Not exceeding Rs.55/- |
Conclusion
The ultimate outcome of digitising financial transactions is to make physical money irrelevant and make money more of a digital unit. This allows for free flow of funds across geographies promoting free flow of trade and other economic activities without much barriers. The idea however will take time to settle down and will require a little bit of a push even from the administrative authorities to implement and normalise. The facilitation of making payment of taxes and government feed and duties online is one such move that has encouraged people to make online transactions more freely.
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