Real Time Gross Settlement

RTGS

Amit, Dhananjay, Kushal, R.D.B, Sarat Chandra, Pradyumna

NAVITAS

RTGS
RTGS- Real Time Gross Settlement Introduced in India since March 2004 Electronic instructions given by remitting banks to transfer funds to beneficiary bank. Maintained and operated by RBI Provides fast and efficient fund transfer

RTGS - MEANING
Funds transfer between banks takes place on a Real time basis i.e., , money reaches the beneficiary instantaneously

Beneficiary bank has to credit the amount within two hours

'Gross settlement' means the transaction is settled on one to one basis No bunching

RTGS vs. NEFT

RTGS
No bunching and continuous throughout RTGS business hours Minimum Amount is 2 lakh No upper ceiling Mainly used by firms

NEFT
Bunching and dis-continuous during NEFT business hours Max. Amount is 50,000 Upper ceiling is there Individuals,firms or corporate

RTGS PLATFORM
RTGS platform contains:
CBS Core Banking System of participants banks PI Participant Interface

IFTP Inter-Bank Fund Transfer Processor

RTGS RTGS system at the RBI RTGS Account
RTGS Current Account with RBI Un-Cleared funds Account Maintained with Deposit Accounts Department, RBI , Mumbai

STRUCTURE OF RTGS PLATFORM

CBS A
PI IFTP

CBS B
PI

RTGS

Process Flow
Customers instruction are checked by the remitting bank(ACCOUNT NO. & IFSC CODE MANDATORY) Debit customer account and transmit details to the PI with priority. Transmit message from PI to IFTP at RBI IFTP system transmits details from remitting bank to the beneficiary bank to RTGS system

FLOW

contd

RTGS queues up transaction based on priority and serial number RTGS system transmits the status of transaction to the IFTP again Successful transaction are send from IFTP to beneficiary bank PI PI to the CBS branch and beneficiary account credited

PRIORITY
Remitting bank has option to prioritize. High value remittance are given high priority Priority to be assigned by PI and mandatory Settled on FIFO basis Priority from 01-99 (01-10 used by RBI) Each transaction has a default priority. If PI does not prioritize then IFTP does it Avoids delays in important transactions

PAYMENT MECHANISM
Queuing: Transaction based on priority
Can be changed by the remitting bank or IFTP

Gridlock: Settling the amount in periodic timing

Can only used by the RBI

REPAYMENTS
Returned to remitting bank by beneficiary bank via RTGS system within 2 hours or end of RTGS day

If the recipient bank does not credit the of the customer

the following charges are applicable
Beneficiary member: current repo rate Originating member: 2% above repo rate

Return payment send as fresh inter-bank payment

UN-CLEARED FUNDS
If the funds are returned then the amount goes to the Uncleared funds account Any funds not cleared will be in Un-cleared funds account These funds remains in the account until the last clearing instruction After all settlement the funds will be transferred to the settlement account

CANCELLATION

No cancellation possible when message is sent to IFTP Special provisions available before settlement
When RBI desires When banks does it before the settlement By RTGS system with validation

Re-Prioritization: Only banks can change within the priority range

INTRA DAY LIQUIDITY

Credit and debit of settlement account may arise in shortfall RBI gives Intra Day Liquidity(IDL) Through Repo against government securities IDL used based on priority generated by RTGS system No interest charged by RBI but securities should be brought before 1.5 hours of next RTGS start- of- day

FEATURES
Amount stipulation
Minimum : Maximum : 2 lakh No upper ceiling

Through Net Banking :

10 lakh

Timing (called RTGS business hours):

9.00 hrs to 16.30 hrs on week days

9.00 hrs to 13.30 hrs on Saturday Through Net Banking 24 x 7

 Electronic Funds Transfer Infrastructure in India Usage of RTGS

Customer Charges RTGS 1 lakh to 2 lakhs above 2 lakhs to 5 lakhs above 5 lakhs Existing Revised 25 25 50 25 50

Thank You