Real Time Gross Settlement System (RTGS) now available for round the clock transactions
Part of: GS Prelims and GS-III – Banking
- 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.
- 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.