Banking these days can be done from the luxury of your home. Gone are the days when you had to visit the bank, fill a challan, and stand in a long queue for a simple money transfer. You could still do that, but why waste precious time when you can make payments and get much more done without having to leave your home or office?
Your bank’s net banking facility enables you to make payments right from your couch and also avail a lot of other banking services too! Whether it’s paying your Credit Card bills or submitting an application for a Personal Loan, you can do it without stepping out of your house and in your pajamas!
Additional Reading: Credit Card Payment Through Net Banking
Modern banking solutions like Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), and Immediate Payment Service (IMPS) have simplified the payment process beyond words. And thanks to these services, your transactions are conducted in the quickest, easiest and safest manner.
Additional Reading: Money Transfers: NEFT, RTGS, and IMPS Explained
You may have heard or even used one of these above options to make payments in the past, but do you know how an online transfer actually takes place? In this article, we will explain to you how the RTGS method of transferring money works.
What is RTGS?
The full form of RTGS is Real Time Gross Settlement and it is a continuous, real-time settlement of funds done individually on an order-by-order basis without netting. In simple words, RTGS is an online banking method that is used to transfer money from one bank to another without any waiting period.
As per the Reserve Bank of India (RBI) the term ‘Real Time’ refers to the processing of instructions at the time they are received rather than at some later time. And ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs individually (on an instruction-by-instruction basis).
Since this system is maintained by the RBI and the settlement of funds takes places in its books, RTGS payments are final and irrevocable. RTGS is one of the fastest means of transferring money through secure banking channels.
Additional Reading: Getting Started With Money Transfers
How is RTGS different from NEFT?
National Electronic Funds Transfer (NEFT) is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes place with all transactions received till a particular cut-off time. These transactions are netted (payables and receivables) in NEFT whereas in RTGS the transactions are settled individually.
Currently NEFT operates in hourly batches. There are 12 settlements from 08:00 hrs to 19:00 hrs on weekdays and six settlements from 08:00 hrs to 13:00 hrs on Saturdays. So any transaction initiated after the settlement time will have to wait till the next designated settlement period.
But, RTGS transactions are processed continuously throughout the RTGS business hours.
Additional Reading: 8 Instant Money Transfer Solutions You Didn’t Know About
Under the RTGS transfer method, you can do a minimum transfer of Rs. 2 Lakhs in a day without any charges. There is no upper limit specified by RBI; though banks can set their own upper limits.
Time duration and intimation
Under normal circumstances, the beneficiary bank branch receives the RTGS funds in real time as soon as the funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary’s account within 30 minutes of receiving the funds transfer message.
So, it takes less than 30 minutes to move money from one bank account to another. Isn’t that cool?
Additionally, the remitting bank receives a message from the RBI that the money has been credited to the receiving bank. Based on this, the remitting bank can advise the remitting customer through SMS that the money has been credited to the receiving bank.
Sure you are worried about non-payment or technical glitches when doing anything online. And you may be wondering what happens to the funds if the transaction fails?
So, your first question would be whether or not the remitting customer will receive the money back if it has not been credited to the beneficiary’s account?
Well, yes! In the event of money not being transferred to the beneficiary’s account the remitter will receive the funds back within one hour or before the end of RTGS business day, whichever is earlier. And once the money is received by the remitting bank, the original debit entry in the customer’s account will be reversed.
Additional Reading: Transferred Money To The Wrong Bank Account?
Timings for payment window
The RTGS service window for customer transactions is available to banks from 09:00 hrs to 16:00 hrs on week days and from 09:00 hrs to 14:00 hrs on Saturdays for settlement at the RBI’s end.
However, do note that the timings followed by your bank may vary depending upon the customer timings at the relevant branch.
Processing charges and service charges
There is no fee or charge for inward transactions. Which means if you are receiving an RTGS payment you will not be charged anything, it’s free!
But, for outward transactions there is a fee charged based on the limit. Which means, if you are making a payment you will be charged as per:
- Rs. 30 per transaction on transactions between Rs. 2 lakh and up to Rs. 5 lakh
- Rs. 55 per transaction on transactions of Rs. 5 lakh and above
Details required for RTGS payment
You need to furnish the following details as a remitting customer in order to make an RTGS payment:
- Amount to be remitted
- Remitting customer’s account number which is to be debited
- Name of the beneficiary bank and branch
- The Indian Financial System Code (IFSC) number of the receiving branch
- Name of the beneficiary customer
- Account number of the beneficiary customer
- Sender to receiver information
Additional Reading: A Quick Guide To IFSC And MICR Codes
RTGS equipped banks
This super cool funds transfer facility isn’t available with all bank branches across the country yet. Currently there are more than 1,00,000 RTGS enabled bank branches. The list of banks that have the RTGS facility can be found on RBI’s website (http://rbidocs.rbi.org.in/rdocs/RTGS/DOCs/RTGEB0815.xlsx)
Issues and Complaints
We understand that sometimes there can be scenarios where things can go wrong, perhaps in case of a non-credit or delay. And while these issues occur you can take them up with your bank’s branch. If you don’t receive a satisfactory response from them, you can lodge a complaint with the Customer Service Department at the RBI. You can address your complaint to:
The Chief General Manager
Reserve Bank of India
Customer Service Department
1st floor, Amar Building, Fort
Mumbai – 400 001
You can also email your concern to firstname.lastname@example.org
Additional Reading: How To Register Your Banking Complaints Online With RBI’s Banking Ombudsman
RTGS, after all, isn’t a complicated way of making payments. All you need is a Savings Account and you’re set. If you already have a Savings Account and are looking to earn more through it you should definitely check out our Fixed Deposit rates.