What is the full form of RTGS

RTGS(Real Time Gross Settlement)

It stands for Real Time Gross Settlement systems.These systems are specialist funds transfer systems where the transfer of money or securities takes place from one bank to any other bank on a “real time” and on a “gross” point.

RTGS (Real Time Gross Settlement)

Settlement in “real time” means a payment transaction is not put through to any waiting period, with transactions being settled as soon as they are processed. “Gross settlement” means the

agreement is subjected on one-to-one basis without package or netting with any other transaction.

RTGS(Real Time Gross Settlement) systems are typically used for high-value transactions that require and receive instant clearing. In some countries the RTGS systems may be the only way to get same day cleared funds and so may be used when payments need to be settled immediately.

However, most regular payments would not use a RTGS system, but rather would use a national payment system or network that allows participants to batch and net payments. RTGS payments typically sustain higher transaction costs and usually operated by a country’s central bank.

To revoke funds to the Inter Bank Payee through RTGS/ NEFT select the ‘Inter Bank Transfer’ link in the ‘Payments/Transfers’ tab. Select the Transaction Type – RTGS or NEFT. The list of beneficiary accounts added is displayed. Enter the Amount and select the legatee to be credited from the list.

What is RTGS System?

‘Real Time’ means the processing of orders 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). Considering that the funds settlement takes place in the books of the Reserve Bank of India(RBI), the payments are final and irrevocable.


RTGS systems are normally operated by a country’s central bank as it is seen as a critical infrastructure for a country’s economy.

Economists maintain that an efficient national payment system reduces the cost of exchanging goods and services, and is indispensable to the functioning of the interbank, money, and capital markets.

A weak payment system may critically drag on the solidity and developmental capacity of a national economy; its failures can result in inefficient use of financial resources, preferential risk-sharing among agents, actual losses for contributor, and loss of confidence in the financial system and in the very use of money.

The motive of RTGS systems by central banks throughout the world is to minimize risk in high-value electronic payment settlement systems. In an RTGS system, transactions are rectify across accounts held at a central bank on a continuous gross basis.

Settlement is immediate, final and irrevocable. Credit risks due to settlement lags are eliminated. The best RTGS national payment system cover up to 95% of high-value transactions within the national financial market.

There are many reasons for central banks to adopt RTGS. First, a decision to acquire is influenced by competitive pressure from the global financial markets. Second, it is more compulsory to adopt an RTGS system for central bank when this allows entrance to a broad system of other countries’ RTGS systems.

Third, it is very likely that the knowledge received through experiences with RTGS systems spills over to other central banks and helps them make their assumption decision. Fourth, central banks do not definitely have to install and develop RTGS themselves.

The possibility of sharing development with providers that have built RTGS systems in more than one country (CGI of UK, CMA Small System of Sweden, JV Perago of South Africa, SIA S.p.A. of Italy and Montran of USA) has apparently lowered the cost and hence made it realistic for many countries to adopt.


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