Big announcement by RBI! RTGS payments to be available 24x7: What it means for consumers

While the entire focus was on RBI's decision to keep the rates unchanged, Governor Shaktikanta Das made another major announcement -  he has allowed Real Time Gross Settlement (RTGS) payment system to be made available round the clock from December 2020 to make online fund transfer smooth. The facility will be made available for all starting December 2020.  

“India will be among very few countries globally with a 24x7x365 large value real-time payment system," Das added 

What is RTGS? 

RTGS or Real Time Gross Settlement payment system refers to funds transfer system that allows for the instantaneous transfer of money and/or securities. RGTS is the continuous process of settling payments on an individual order basis without netting debits with credits across the books of a central bank. This payment system has no amount cap. 

How will the decision help consumers? 

RBI’s latest decision will improve the ease of doing operations, Reserve Bank of India (RBI) Governor Shaktikanta Das said while announcing the decisions taken by the central bank’s Monetary Policy Committee (MPC). 

As of now, RTGS is not a 24x7 system. The window is available between 7 am and 6 pm on a working day, for settlement at the RBI end. However, the timings that the banks follow may vary from bank to bank. This mode of payment is used for large value transactions. The minimum amount to be remitted through RTGS is Rs 2,00,000 with no upper or maximum ceiling. 

Meanwhile, the Reserve Bank of India (RBI) on Friday kept the repo rate unchanged on 4 per cent, as speculated by most analysts and experts. It also maintained the accommodative stance while keeping the MCLR and repo rates unchanged too. Addressing the media, RBI Governor Shaktikanta Das said that he the central bank will keep its accommodative stance at least for this financial year and more, till economic stability is achieved.