What is RTGS? Understand Its Full Form, Features, Limit and Charges

Updated on: 18 August 2023

Published on: 11 August 2023

Wondering what is RTGS? It is a payment facility through which you can transfer money swiftly from one bank account to another. The process is quick and the RTGS transfer charges are also nominal, if any. 

You may have come across this term in your regular retail banking transactions along NEFT, which is another kind of transfer system between banks. 

Read on to learn more about RTGS payment, its features, RTGS transfer time, charges and more.

Guide to RTGS

The Reserve Bank of India established RTGS in 2004. The full form of RTGS is Real-Time Gross Settlement. Here, ‘real time’ refers to the speed at which funds are transferred. As such, you get the experience of instantaneous transactions. 

On the other hand, “gross settlement” indicates the individual settlement of each transaction. This means that there is no bundling or grouping of multiple transactions. Together, this forms the foundation of the real-time gross settlement system. 

As per the RBI guidelines, banks are required to follow the RTGS settlement time of 30 minutes at the most. This results in a quick and efficient transfer of funds. Given this, an RTGS money transfer is a popular option for many across the country. It is no surprise that this is an option available in thousands of bank accounts in India. 

Features of RTGS

There are several features of RTGS that make transferring money convenient and secure.

• Online and Offline Transfers

You can initiate money transfers through RTGS from any location using online banking services. Alternatively, RTGS money transfer also has an offline option to help you deposit funds in a bank. Choose the RTGS services of a bank and fill in the required form to authorise such a transaction.

• Instant Clearance

Since the RBI has directed banks to keep the RTGS transfer time at 30 minutes, your requests get cleared instantly.

• Irrevocable Transactions

You cannot reverse an RTGS money transfer at any point. The transferred amount becomes irrevocable once you make the transaction through the system. This provides an added layer of security. You can be assured that your funds will reach the intended recipient without any possibility of reversal.

• Low Minimum Threshold 

The minimum amount supported by an RTGS money transfer is ₹2 lakhs. The RTGS system will not support a transfer amount below this threshold.

• No Upper Limit

Most digital payments come with limitations like a transaction limit, maximum amount limit, etc. RTGS takes the upper hand here as it comes with no upper limit. This makes it an ideal choice for high-value transactions. However, keep in mind that online transfers related to RTGS may come with an upper cap, depending on the bank.

Charges of RTGS Transfer

RTGS gives you the facility to both receive and transfer funds. While receiving an RTGS payment attracts no charges, initiating it does. Although there is no processing fee charged by the RBI on RTGS transactions, banks may levy certain charges when paying a beneficiary offline. Such RTGS transfer charges depend on your bank. 

However, the RBI has set a cap on the maximum a bank can charge for an outward RTGS transaction. It is as follows: 

• If the RTGS amount ranges between ₹2 lakhs to ₹5 lakhs, the banks can charge a maximum of ₹24.50 plus taxes
• If the RTGS amount is above ₹5 lakhs, the banks can charge a maximum of ₹49.50 plus taxes

Remember, these RTGS charges are only applicable when you choose an outward transaction, meaning a transaction where you are not the recipient. There is no charge levied on any inward transaction to your account through RTGS.

Now that you know its full form, how much time RTGS takes and its features, remember to enter the correct details. This will ensure that you have quick access to funds, especially during an emergency.

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FAQs on RTGS

What is the RTGS full form?

The full form of RTGS is Real Time Gross Settlement.

What is RTGS in banking?

RTGS in banking refers to a secure electronic mode of instant fund transfers.

When did RTGS come into use in India?

The RTGS system has been available in India since 2004. 

What is an RTGS transfer?

An RTGS transfer is the process of sending funds instantly from one bank to another.

How to write an RTGS cheque?

To write a cheque for RTGS, you will need to enter the beneficiary bank details (account number, name, bank name, etc.) and the amount you want to transfer. The RTGS form, on the other hand, will require transaction details as well as the cheque number.

How long does RTGS take?

RTGS transactions are meant to be instant and should take no longer than 30 minutes, as per the guidelines set by the Reserve Bank of India.

What is RTGS payment?

RTGS payments are a secure option for real-time transfer of money.

What is the RTGS limit?

The transfer limit depends on the bank. However, the RBI has imposed no upper limit on RTGS transactions.

How can I write “myself” for an RTGS cheque?

To draw a self-withdrawal RTGS cheque, you will have to write ‘Yourself for RTGS’ on the cheque leaf. You can also confirm this with a representative at the bank, as different banks may require different wording.