RTGS (Real-Time Gross Settlement) transfers are processed in real-time, ensuring that the beneficiary's account is typically credited within 30 minutes of the transaction.
Understanding RTGS Processing Time
Real-Time Gross Settlement (RTGS) is a system designed for large-value interbank funds transfers that provides immediate and final settlement of payments individually. This means that once an RTGS transaction is initiated, the funds are processed and settled continuously, without any waiting period or batching.
Key aspects of RTGS processing time include:
- Real-Time Processing: As the name suggests, RTGS transactions are processed continuously. This is crucial for high-value transactions, as it minimizes settlement risk.
- Immediate Credit: While the processing is instantaneous, there's a short period for the funds to reflect in the beneficiary's account. Typically, the credit occurs within half an hour of the transaction being completed by the remitting bank.
- Gross Settlement: Each transaction is settled individually, on a one-to-one basis, rather than being netted with other transactions. This contributes to the finality and speed of the settlement.
How RTGS Works
When you initiate an RTGS transfer, the process generally follows these steps:
- Initiation: The remitting bank receives the RTGS request from the customer.
- Validation: The bank validates the transaction details, including the beneficiary's account number and IFSC code.
- Processing: The transaction is sent through the RTGS network.
- Real-Time Settlement: Funds are debited from the sender's account and credited to the beneficiary's bank account in real-time.
- Beneficiary Credit: The beneficiary's bank processes the incoming funds and credits the beneficiary's account, usually within 30 minutes of receiving the funds.
This efficient system makes RTGS a preferred method for urgent and large-value fund transfers, offering speed and reliability.
