The Reserve Bank of India (RBI) has been on a spree to ease the processes of transaction by digitally-driven banking for customers this year. Earlier this year, the RBI had operationalised NEFT, a popular mode for small-value transactions, 24x7. In a similar move, the apex bank has now chosen to make available the Real Time Gross Settlement System (RTGS) for high-value transactions above Rs 2 lakh round-the-clock, that too sans service charges.
This will make India one of the few countries in the world to operate the system 24X7. In October, the RBI had announced that RTGS will be available round-the-clock on all days of the year.
"RTGS facility becomes operational 24X7 from 12.30 am tonight. Congratulations to the teams from RBI, IFTAS and the service partners who made this possible,” RBI Governor Shaktikanta Das said in a tweet. India will become one of the few countries in the world to operate its RTGS system round-the-clock throughout the year.
What is RTGS?
RTGS, which began its operations on March 26, 2004 with a soft launch involving four banks, presently handles 6.35 lakh transactions daily for a value of Rs 4.17 lakh crore across 237 participant banks.
The average ticket size for RTGS in November 2020 was Rs 57.96 lakh, making it a truly large value payment system.
RTGS uses ISO 20022 format which is the best-in-class messaging standard for financial transactions. The feature of positive confirmation for credit to beneficiary accounts is also available in RTGS.
“Round the clock availability of RTGS will provide extended flexibility to businesses for effecting payments and will enable introduction of additional settlement cycles in ancillary payment systems. This can also be leveraged to enhance operations of Indian financial markets and cross-border payments,” RBI had said last week.
Earlier, RBI had decided not to levy charges on transactions through NEFT and Real Time Gross Settlement (RTGS) system in order to promote digital transactions in the country, and asked banks to pass on the benefits to the customers.
The RBI used to levy minimum charges on banks for transactions routed through RTGS and NEFT. Banks, in turn, levied charges on their customers. RTGS is meant for large-value instantaneous fund transfers, while NEFT is used for fund transfers of up to Rs 2 lakh.
(With PTI inputs)
