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Real Time Gross Settlement System (RTGS) now available for round the clock transactions

  • IASbaba
  • December 14, 2020
  • 0
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Real Time Gross Settlement System (RTGS) now available for round the clock transactions

Part of: GS Prelims and GS-III – Banking

In news

  • The RBI has announced that the Real Time Gross Settlement System (RTGS) facility will now be available for round the clock transactions, with effect from December 14th, 2020.

Key takeaways

  • Round the clock availability of RTGS will provide extended flexibility to businesses for effecting payments.
  • The system can also be leveraged to enhance operations of Indian financial markets and cross-border payments.
  • RTGS uses ISO 20022 format which is the best-in-class messaging standard for financial transactions.

Important value addition:

  • The term real-time gross settlement (RTGS) refers to a funds transfer system that allows for the instantaneous transfer of money and/or securities.
  • It is the continuous process of settling payments on an individual order basis without netting debits with credits across the books of a central bank.
  • Once completed, real-time gross settlement payments are final and irrevocable.
  • RTGS presently handles 6.35 lakh transactions daily.

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