1. Real Time Gross Settlement
RTGS
Real Time Gross Settlement
An Insight……
Presentation by S.R.Ramananda,
Consultant, IT Solutions

2. Introduction
“RTGS” stands for Real Time Gross Settlement. RTGS system is a funds transfer mechanism where transfer of money takes place from one account of one bank to another account of another bank on a “real time” and on “gross” basis.

3. RTGS
Settlement in “real time” means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed.
“Gross settlement” means the transaction is settled on one to one basis without bunching with any other transaction

4. Regarding RTGS
Real Time Gross Settlement (RTGS) system, introduced in India since March 2004, is a system through which electronic instructions can be given by banks to transfer funds from their account to the account of another bank.
The RTGS system is maintained and operated by the RBI and provides a means of efficient and faster funds transfer among banks facilitating their financial operations.
As the name suggests, funds transfer between banks takes place on a ‘real time’ basis. Therefore, money can reach the beneficiary instantaneously and the beneficiary’s bank has the responsibility to credit the beneficiary’s account within two hours.

5. Volume and Value of Transactions
On a typical day, RTGS handles about transactions a day
Approximate value of turnover Rs.1,50,000 crores per day.
33000 branches at more than 3,000 cities/ towns and taluk places are covered under the RTGS system, .

6. Flow of RTGS Transactions PI (Participatory Interface)
Thru P-Connect
Processing
by Branch
Official
in P-Connect
Authorizing
By officer at Branch
Updating in
CBS HO
RTGS ops
PI (Participatory Interface)
RBI
RTGS Payment Gateway
Bank-1 Settlement A/c PI
(Bank-1)
Host (Bank-1)
Bank-2 Settlement A/c
PI (Bank-2)
Host (Bank-2)
Outwards
Inwards
Bank-3 Settlement A/c
PI (Bank-3)
Host (Bank-3)

7. Step by Step description of the RTGS process flow Step 1
Customer submits the outward Instruction slip
Step 2
Scrutiny of Instruction slip (Clear funds, name and a/c no. of customer, IFSC code, signature)
Step 3
Branch scans the Instruction slip in Staffware  & sends it to RTGS Central Team
Step 4
Branch will file the slip for the purpose of maintaining records
Step 5
RTGS Central Team executes the transaction in Finacle and Participant Interface (PI) of RTGS

8. Message moves to RBI Server
Step 6
Message moves to RBI Server
Step 7
Bank’s RTGS Settlement Account is debited and Beneficiary Bank’s RTGS Settlement Account is credited
Step 8
Beneficiary Bank passes the credit to the beneficiary customer’s account
   

9. About RTGS…
Payment instructions between banks are processed and settled individually and continuously without netting the debits against credits
Payments are processed as per prescribed Timings by RBI (except on Sundays and National holidays across states)
Transactions Supported through RTGS presently -
Inter-bank Payments
Customer Payments
Own Account Transfers
Net Clearing
NDS / CCIL

10. Benefits of RTGS … Secured Online Real Time Funds Transfer
To Customers..
Secured Online Real Time Funds Transfer
Eliminates problem of debtors delaying their payments
No longer the customer have to rely demand draft (DD) / cheque.
No more the anxious wait for a week or a fortnight, wondering if the instrument reached safely and was duly realized.
Debtor will no longer be able to enjoy the kind of "float" he did by deliberately giving an outstation cheque
Debtor will not be able to give "stop payment" instructions to his bank to escape payment.

11. To Economy..
RTGS will reduce the systemic risk that exists in the present settlement systems like cascading affect on banks due to failure of one bank to meet it's settlement commitments.
It improves confidence of out side agencies like world bank in Indian Economy
It enables efficient settlements and avoids settlement delays

12. Transaction initiation By person receiving payment
 COMPARISION
Clearing system
RTGS
Settlement basis
Net
Gross
Time of settlement
At specified times
On continuous basis
System Based on
Physical instruments
Electronic messages
Transaction initiation
By person receiving payment
By person making payment.
Receipt of funds
Depends on location and clearing type
Day zero
Finality of Settlement
Only after return clearing
Immediate, final and irrevocable
Return reason
Insufficient funds, stale instruments
Incorrect account no., account frozen

13. Charges Charges are fixed
Very cheaper compare to the charges o DD and other mode of transfer of funds
For Corporate Clients:
Outward transactions  
Min Rs.250, Max 1500)
Inward transactions:Rs.100 
For retail category
Outward transactions
for SB :MIN 150 Rs and MAX 1500
for Current account :min 250 , maximum 1500 Inward transactions :No Charges

14. Remitting customer has to furnish the following information
1. Amount to be remitted
2. His account number which is to be debited
3. Name of the beneficiary bank
4. Name of the beneficiary customer
5. Account number of the beneficiary customer
6. Sender to receiver information, if any
7. The IFSC code of the receiving branch

15. About RTGS… Limitation: Restriction:
- Customer Transactions - >Rs. 1 Lakh – No upper Limit – Targeted for Corporate / Interbank Payments
- Interbank Transactions – Re 1 & above – No upper Limit
Restriction:
- Against Cash – not maintaining account with us
- Inward RTGS Credit to parties who are not having account with us

16. Exclusions:
Purpose of payment (“Sender to Receiver Info”) is to be captured in the message (AML)
Sender Name / A/c No. / Address mandatory in message (KYC)
Source of funds mandatory in case of NRI / NRE A/cs
RBI Payment Gateway cancels any RTGS transaction processed after cut-off time. “Cancellation” of payment is “non-compliance” of RBI guidelines
Transactions cannot be processed on Sunday / National Holidays
Any transactions processed after cut-off time/ Holidays – It throws message “Payment will be effected on next working day”. Branches shall note to inform RTGS Ops to push the same. Without confirmation from Branch, transaction will not be considered settlement on next working day.

17. Thank You