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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 14^th, 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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