What is Real Time Gross Settlement?

Explain RTGS

 

RTGS stands for real time gross settlement, which means that it enables money to move from one bank to another on a real time and gross basis. Simply 'Real Time' means the processing of instructions at the time they are received rather than at some later time; 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Since the funds settlement takes place in the books of the Reserve Bank of India (RBI), the payments are final and irrevocable. The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is 2 lakh. There is no upper ceiling for RTGS transactions.


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