RTGS 24x7: Launch date ANNOUNCED by RBI - Big proud moment for India! Check benefits of this system

It's a big proud moment for India as the Reserve Bank of India (RBI) has announced the date for the launching of RTGS 24x7. The Reserve Bank had announced in the statement on Developmental and Regulatory Policies dated October 09, 2020, that the Real Time Gross Settlement System (RTGS) will be available round the clock on all days of the year. Accordingly, RTGS 24x7x365 will be launched with effect from 00:30 hours on December 14, 2020.

India will become one of the few countries in the world to operate its RTGS system round the clock throughout the year. This comes within a year of operationalising NEFT 24x7 by the Reserve Bank.

RTGS

RTGS, which began its operations on March 26, 2004 with a soft launch involving four banks, presently handles 6.35 lakh transactions daily for a value of ₹4.17 lakh crore across 237 participant banks.

The average ticket size for RTGS in November 2020 was ₹57.96 lakh making it a truly large value payment system. RTGS uses ISO 20022 format which is the best-in-class messaging standard for financial transactions.

The feature of positive confirmation for credit to beneficiary accounts is also available in RTGS.

"Round the clock availability of RTGS will provide extended flexibility to businesses for effecting payments and will enable introduction of additional settlement cycles in ancillary payment systems. This can also be leveraged to enhance operations of Indian financial markets and cross-border payments," the central bank said in a statement.

Real Time Gross Settlement can be explained as a system where there is continuous and real-time settlement of fund-transfers, individually on a transaction by transaction basis (without netting). 'Real Time' means the processing of instructions at the time they are received; 'Gross Settlement' means that the settlement of funds transfer instructions occurs individually.

Benefits of using RTGS?

-RTGS offers many advantages over the other modes of funds transfer:

-It is a safe and secure system for funds transfer.

-RTGS transactions / transfers have no amount cap.

-The system is available on all days when most bank branches are functioning, including Saturdays.

-There is real time transfer of funds to the beneficiary account.

-The remitter need not use a physical cheque or a demand draft.

-The beneficiary need not visit a bank branch for depositing the paper instruments.

-The beneficiary need not be apprehensive about loss / theft of physical instruments or the likelihood of fraudulent encashment thereof.

-Remitter can initiate the remittances from his / her home / place of work using internet banking, if his / her bank offers such service.

-The transaction charges have been capped by RBI.

-The transaction has legal backing.