What is RTGS? Full Form, Meaning and How to do RTGS

What is RTGS Transfer?

RTGS stands for Real-Time Gross Settlement, an electronic funds transfer system in India that facilitates immediate settlement of high-value transactions (typically above ₹2 lakhs) between banks. Each transaction is settled individually and in real-time, ensuring secure and efficient transfers without netting.

Central banks or financial authorities oversee the entire process. This ensures that the payment system has an extremely high level of security, making it resistant to counterparty risks.

Benefits of RTGS (Real-Time Gross Settlement)

1. Risk Reduction

RTGS helps reduce the risks involved in high-value payment settlements between financial institutions.

2. Enhanced Financial Security

Due to their effectiveness in strengthening financial security, central banks worldwide are more frequently adopting RTGS systems.

3. Real-Time Settlement

RTGS transactions are settled in real-time, which protects financial data by reducing the time window during which it is susceptible to hackers.

4. Cybersecurity Mitigation

RTGS mitigates cybersecurity dangers like social engineering, phishing, and data theft by minimizing the risk of exposing critical information.

5. Regulated Transaction Charges

The RBI has capped transaction charges, and each transaction is legally backed.

6. Real-Time Online Fund Transfer

Money can be transferred electronically in real-time from one bank to another via RTGS.

7. Suited for High-Value Transactions

RTGS is usually used for high amounts above a certain threshold, such as ₹2 lakh.

8. Safe and Secure

With RBI backing this system, the risk of security breaches or fraudulent transactions is almost zero.

9. Quick Settlement

Under RTGS, payments are settled within 2 hours and are quickly reflected on the beneficiaries’ end.

10. Available 24×7

You can initiate RTGS transfers at any time of the day or night.

Read More About: Features of RTGS

How Does RTGS Works? A Step-By-Step Guide

Let’s understand how do RTGS work in this section in detail:

STEP 1: Initiation

RTGS starts working when you initiate the transfer at your bank by providing the recipient’s bank details, account number, and transfer amount.

STEP 2: Verification

The bank will confirm that you have enough money in your bank account to cover the transfer.

STEP 3: Central Bank Involvement

After the verification, the message is forwarded to the central bank that is acting as an intermediary between the two entities.

STEP 4: Real-Time Transfer

The central bank quickly responds by verifying the funds and instantly transfers them from your account at the central bank to the recipient’s bank account.  This happens in real-time, typically within seconds or minutes.

STEP 5: Beneficiary Bank Update

Recipient’s bank will be informed about the incoming funds by the central bank through the notification message.

STEP 6: Completion

The recipient’s bank receives a credit transfer of the amount the sender sent. Both you and the recipient receive notifications about the completed transaction.

What are the Methods of RTGS Transfer?

Here are the different methods to initiate RTGS transfers:

1. Internet banking

Most banks offer online banking services, and you can log in to your account to initiate an RTGS transfer online. In this case, you select the option, enter the name of the beneficiary, amount, and other required details, and then complete the process.

2. Mobile banking apps

In today’s digital world, you can now use your mobile banking app to initiate RTGS transactions as quickly as ever. These apps have been developed to simplify the process and enable you to make RTGS transfers from your mobile internet or tablet.

3. Bank branch

If you are more of a traditional person, you can go to your bank branch and initiate the RTGS transfer in person. The bank staff will help you fill in the form and necessary details, verify them, and process the transaction on your behalf.

What are the Details Required for RTGS Payments?

To initiate an RTGS payment, the following details are typically required:

1. Beneficiary’s Name

Full name of the person or entity receiving the funds.

2. Beneficiary’s Bank Name

Name of the bank where the beneficiary holds the account.

3. Beneficiary’s Bank Branch

The specific branch of the beneficiary’s bank.

4. Beneficiary’s Account Number

The account number where the funds will be credited.

5. IFSC Code

The Indian Financial System Code (IFSC) of the beneficiary’s bank branch to identify the specific location for the transfer.

6. Amount

The exact amount to be transferred (must be above ₹2 lakhs for RTGS).

7. Sender’s Account Details

Information about the sender’s account (name, number, and branch).

8. Purpose of Transfer

The reason or purpose for making the payment, which might be required by the bank.

How to do RTGS Fund Transfer Online?

STEP 1: Login to Net Banking

Go to your bank’s Internet banking website and log in using your credentials.

STEP 2: Navigate to Transfers

Then, look for the “Fund Transfer” or “Payments” section to check out the available options.

STEP 3: Initiate RTGS Transfer

Choose “RTGS” as the transfer method. If RTGS is not displayed as one of the options, you can choose “Interbank Transfer” or any other option that may seem related.

STEP 4: Add Beneficiary

For the first transfer to the recipient, you will need to add this person as a beneficiary. Please proceed with adding the recipient’s bank account details along with the beneficiary’s name and IFSC code.

STEP 5: Enter Transfer Details

Then, you will need to provide the amount of money you want to transfer along with any optional reference.

STEP 6: Review and Confirm

Make sure to recheck all the details, such as the beneficiary and the sum you are going to transfer. If everything is correct, proceed by confirming.

STEP 7: Authentication

Your bank will send you a one-time password to verify your identity. Be ready to enter the received OTP.

STEP 8: Confirmation

As a result, you will receive a verification of a transaction along with a reference number, and the recipient will be notified instantly.

Read More About: How to Do Fund Transfer Using RTGS?

What are the RTGS Transaction Charges? 

• Inward Transactions: Receiving RTGS payments is free for the recipient. The RBI mandates that banks cannot charge customers for receiving funds via RTGS.
• Outward Transactions: Banks may charge a service fee for sending RTGS payments, but these charges must be within RBI-prescribed limits:

Transaction Amount	Maximum Service Charge
₹2 lakh to ₹5 lakh	Up to ₹25 (exclusive of taxes)
Above ₹5 lakh	Up to ₹50 (exclusive of taxes)

 

Important Notes

• These are the maximum limits set by the RBI. Your bank might offer lower fees for RTGS transactions.
• Always check your bank’s website or mobile app for their specific RTGS charges before initiating a transfer. This will ensure you’re aware of the exact cost involved.

What are the Timings for RTGS Payments? 

Effective December 2020, the Reserve Bank of India (RBI) has enabled 24/7 availability for RTGS transactions throughout the year. However, it is essential to note that individual banks may have brief maintenance windows during which RTGS processing might be temporarily suspended.

For example:

• State Bank of India (SBI): Offers 24/7 RTGS processing with the exception of a scheduled maintenance window between 11:50 PM and 12:30 AM.
• HDFC Bank: Similar to SBI, HDFC Bank offers 24/7 RTGS processing except for a maintenance window between 11:30 PM and 12:30 AM.
• Axis Bank: Axis Bank provides 24/7 availability for RTGS transactions. On weekdays, transactions initiated between 7:00 AM and 7:00 PM are processed in real-time. Transactions initiated between 7:00 PM and 7:00 AM are processed the following business day.  

To ensure a smooth transfer experience, we highly recommend verifying the specific RTGS availability and processing times with your respective bank before initiating a transaction.

Read More: RTGS Transfer Timings in India for 2024

RTGS Transaction Limits in India

1. Minimum Amount

RTGS has a minimum limit of ₹ 2 lakh (2,00,000) in India. This ensures that only high-value transactions are processed and there is less traffic on the RTGS system.

2. RTGS Limit Per Day via Bank Branch

RTGS is not subject to any upper limit when bank branches are concerned. This implies that you can send any amount above the minimum limit without any restrictions.

3. RTGS Limit Per Day via Internet Banking

In the case of an RTGS transaction through internet banking, an upper limit is usually set. The majority of banks will impose this limit at ₹ 25 lakh (25,00,000). Some banks have higher limits, while others limit it on the lower side of the estimate for internet banking.

How is RTGS different from National Electronic Funds Transfer (NEFT)?

The transactions done via NEFT are processed in batches. In RTGS, it’s the contrary; transactions are processed continuously on a transaction-by-transaction basis throughout the RTGS business hours.

Read More About: Difference Between NEFT and RTGS

Important Points to be Noted Before an RTGS Transaction

1. Review Terms

Briefly skim the RTGS form to understand your bank’s terms and conditions, which usually align with RBI guidelines. This ensures a smooth transaction.

2. Double-Check Details

Accuracy is key! Verify all beneficiary information, including account number, name, and IFSC code. Errors can lead to delays or failed transfers. Your bank is not responsible for incorrect details.

3. Choose Your Method (if offered)

Some forms might offer both NEFT (for smaller transfers) and RTGS options. Choose based on urgency. Otherwise, the bank will decide (NEFT for < ₹2 lakh, RTGS for > ₹2 lakh).

Conclusion

The Real-Time Gross Settlement (RTGS) system offers a secure and efficient way to transfer large sums of money electronically within India, with the added convenience of 24/7 availability. This means you can initiate and complete RTGS transactions any day of the week, including weekends and holidays. Thanks to the RBI’s removal of transaction fees, RTGS is an even more attractive option for large value transfers. For smaller, immediate transfers, consider alternative methods like NEFT or UPI.

Related Read: How to Check RTGS Status by UTR Number?

Frequently Asked Questions (FAQs)

1. What is the full form of RTGS?

The full form of RTGS is “Real-time Gross Settlement”

2. What types of transactions are typically done using RTGS?

RTGS is generally used for high-value transactions such as:

• Interbank settlements
• Government payments
• High-value business transactions (e.g., property purchases)

3. What is the minimum amount for RTGS? 

The minimum amount for making transactions is ₹ 200,000, whereas no limit has been set for the maximum amount.

4. How much time does RTGS take? 

RTGS is conducted in “real-time,” implying that the scheduled transaction is executed immediately within seconds. 

5. What happens if I enter incorrect beneficiary details?

It’s crucial to ensure all beneficiary details are accurate to avoid delays or errors. The bank is not responsible for issues arising from incorrect information provided. Double-check all details before submitting your RTGS request.

6. Can RTGS be done without a Cheque? 

Making an RTGS transaction is possible without a check. You can accomplish this digitally via mobile apps or by logging in to the internet banking facility provided by your bank.

7. How can I find the IFSC code of the receiving branch?

The Reserve Bank of India (RBI) maintains a publicly accessible list of IFSC codes which is updated on a regular basis. However, it’s generally easier to obtain the code directly from the beneficiary or through your bank’s resources.

8. Can I do RTGS from a non-home branch? 

Yes, RTGS may be done through a non-home branch. However, there may be some changes depending on the bank’s policies.

9. How can I check my RTGS status?

You can check the status of your RTGS transaction by checking via bank, using the net banking facility or mobile app.

10. Can I get compensation for a delayed refund of a failed payment?

In some cases, yes. If your bank takes an unreasonably long time to return a failed payment (such as a declined transaction or a reversed charge), you might be eligible for compensation. The compensation rate might be based on the prevailing repo rate set by the central bank, often with an additional percentage (e.g., repo rate + 2%)

11. Whom should I approach for raising a dispute/complaint related to an RTGS transaction?

Contact Your Bank: This is the first step. Reach out to your bank’s customer service department through their phone number or secure website login.

Escalate to the RBI Ombudsman Scheme (RB-IOS): If you’re not satisfied with your bank’s response, you can escalate the complaint to the RBI Ombudsman Scheme. You can file a complaint online through the RBI’s website.

12. How can I use RTGS offline? 

RTGS can be done offline by visiting the closest bank branch and completing the RTGS transactions offline. This ensures that those without internet or mobile banking can transfer money using RTGS.

13. What are the disadvantages of RTGS? 

The disadvantages of RTGS include:

• The necessity of a demand draft or a cheque when transacting through a branch,
• The restricted access to Internet banking (the maximum limit for this is Rs. 25 lakh).

14. Is it possible to plan an RTGS transaction in advance?

Yes, RTGS transactions can be planned in advance. The transaction can be initiated online or offline, and you must submit the necessary details to the bank. Subsequently, the bank will proceed with the transaction processing at the specified time.

15. How to fill out the RTGS form?

1. Please obtain an RTGS form from your bank.
2. Fill in your details: account number, amount to be transferred, beneficiary details.
3. Confirm the accuracy of the info given.
4. Fill the form as required.
5. Attach all the documents to the application form and send it to the bank.
6. Receive the confirmation of the transaction.
7. Make sure to keep the form as evidence.