RTGS Full Form, Meaning, Features, Benefits and How RTGS Works

RTGS stands for Real-Time Gross Settlement. It is a payment system used by banks to transfer funds instantly, where each transaction is processed individually and settled in real time. Knowing how RTGS works is important for anyone who needs to move high-value funds quickly between bank accounts.

Key Highlights

RTGS full form in banking is Real-Time Gross Settlement.
Transfers are executed in real time, one transaction at a time.
The minimum amount for RTGS is ₹2,00,000 with no upper limit.
Available 24 hours a day, including weekends and holidays.
Operates under RBI supervision, ensuring high security.

What is RTGS?

RTGS, or Real-Time Gross Settlement, is a payment mechanism that allows fast and direct fund transfers from one bank account to another. As the name indicates, transactions are handled and settled immediately, on an individual basis, without being grouped or netted with other transactions. Settlement continues throughout the day, making RTGS ideal for time-sensitive, high-value payments.

Features of RTGS

Instant Processing: Funds are settled immediately in real time.
High-Value Payments: Minimum transfer value is ₹2 lakh; no maximum limit applies.
Round-the-Clock Service: RTGS remains operational 24×7, including weekends and public holidays.
Secure System: It is an RBI-regulated and highly secure payment method.
Individual Settlement: Each transaction is processed separately, not in batches.
Multiple Access Channels: RTGS can be initiated through online banking, mobile apps, or at bank branches.

How Does RTGS Work?

The customer starts the RTGS transfer using internet banking, mobile banking, or by visiting the bank.
The bank checks fund availability in the customer’s account and authorises the request.
The bank then forwards the instructions to the central RTGS system.
After verification, the central bank debits the remitting bank and credits the beneficiary’s bank.
The receiving bank confirms the credit to the sender’s bank.
The sender is notified once the money is successfully transferred.

RTGS Example

For instance, if you initiate an RTGS transfer of ₹3,00,000 at 11:00 a.m., the bank will process it instantly, and the recipient is likely to receive the amount within a few minutes—possibly by around 11:30 a.m.

Ways to Transfer Funds Through RTGS

Here are the different methods available to carry out an RTGS transfer:

Internet Banking: Customers can use their bank’s online banking platform to initiate RTGS transactions. After adding a beneficiary successfully, funds can be transferred to their account.
Mobile Banking Apps: Most banks offer mobile applications that allow users to perform RTGS transfers conveniently using their smartphones or tablets.
Bank Branch: Individuals who prefer assistance can visit a bank branch and complete an RTGS transfer by filling out the required form, which the bank staff will process.

RTGS Requirements

To initiate an RTGS transaction, the following details are required:

Beneficiary’s name
Beneficiary’s bank name and branch
IFSC code of the beneficiary’s bank branch
Beneficiary’s account number
Amount to be transferred
Sender-to-receiver information, if needed
Notes or references (optional)
Sender and beneficiary Legal Entity Identifier, if applicable

How to Do RTGS Online?

To complete an RTGS transfer online, you must first add the beneficiary unless already added earlier. Once the beneficiary setup is complete, you can proceed with the transfer.

Steps to Add a Beneficiary:

Log in to your bank’s internet banking account.
Navigate to the Funds Transfer section.
Select Add Beneficiary.
Enter the beneficiary’s account number, IFSC code, bank name, and branch details.
Click Add and confirm the request.
Authenticate the action using your login credentials or OTP.
You will receive a confirmation once the beneficiary has been successfully added.

Steps to Complete an RTGS Transfer:

Log in to your bank’s online banking portal.
Open the Funds Transfer tab.
Choose the beneficiary’s account and select RTGS as the payment mode.
Enter the amount you wish to send.
Accept the terms and conditions by checking the relevant box.
Review the details and click Confirm to process the transaction.

How to Do RTGS Offline?

Step 1: Visit the bank branch where you maintain your account and request to initiate an RTGS transaction.

Step 2: Fill out the RTGS form provided by the bank, entering details such as the beneficiary’s name, account number, bank information, the amount to be transferred, and your own account details.

Step 3: Submit the completed form along with your ID proof or any other documents required by the bank.

Step 4: If applicable, pay the RTGS charges as per the bank’s fee structure.

Step 5: The bank will process your request and issue a confirmation slip or message containing the transaction reference number and status.

RTGS Form

Every bank offers its own RTGS form, which can be collected directly by visiting the respective branch.

RTGS Transaction Fees in India

The RBI removed processing charges for RTGS transactions starting 1 July 2019. To streamline the service charges imposed by banks for RTGS fund transfers, the RBI has prescribed the following broad limits:

Transaction Amount	Maximum Charges (excluding GST)
₹2,00,000 to ₹5,00,000	Not more than ₹25
Above ₹5,00,000	Not more than ₹50

However, banks may have their own fee structure, and most banks do not levy any charges for RTGS transfers done through online banking.

RTGS Timings

From December 2020 onward, RTGS has been made available round the clock—24 hours a day, 365 days a year—including weekends, bank holidays, and public holidays.

RTGS Limit

As per RBI guidelines, the minimum limit for RTGS is ₹2,00,000, and there is no maximum cap on the transfer amount.

Benefits of RTGS

RTGS (Real-Time Gross Settlement) offers several advantages:

Highly secure, as it operates under the supervision of the Reserve Bank of India (RBI).
Enables real-time fund transfers, with the beneficiary receiving money within minutes.
No upper limit on the transaction amount, making it ideal for high-value and business payments.
Can be conveniently initiated online via internet banking, eliminating the need to visit the branch.
Ensures privacy, as sensitive financial information is protected, reducing risks of hacking or data tampering.
Transaction fees are regulated by the RBI, ensuring transparency with no hidden charges.
Available 24/7 throughout the year, providing continuous access for sending and receiving funds.

Challenges of RTGS

While RTGS offers numerous benefits, it also comes with certain limitations. Here are some common issues associated with RTGS transactions:

RTGS has a minimum transfer limit of ₹2,00,000, making it unsuitable for smaller payments due to this restriction.
Once an RTGS request is initiated, it cannot be cancelled or reversed. Therefore, entering accurate beneficiary details—such as the name, account number, and IFSC code—is crucial to avoid errors.
RTGS supports transfers only to bank accounts within India. It cannot be used for cash payments, international remittances, or cross-border transfers.
The speed and success of an RTGS transfer depend on the technical capabilities of both the sender’s and the recipient’s banks. Any system issues may cause delays.
Sufficient funds must be available in the sender’s bank account; otherwise, the RTGS transaction will not proceed and may get delayed.

RTGS vs NEFT

RTGS transactions are processed in real time, while NEFT settles payments in half-hourly batches. NEFT allows small-value transfers starting from ₹1, whereas RTGS requires a minimum amount of ₹2,00,000.

RTGS vs IMPS

Both RTGS and IMPS process payments in real time. However, IMPS is available only online and cannot be initiated at a bank branch. IMPS supports transfers from ₹1 up to a maximum of ₹2,00,000, whereas RTGS has no upper limit but requires a minimum of ₹2,00,000.

Conclusion

RTGS (Real-Time Gross Settlement) is a secure and dependable option for instant, high-value fund transfers between banks. With continuous availability, fast processing, and RBI oversight, it remains a preferred method for large payments. Understanding how RTGS functions helps both individuals and businesses manage their banking operations more efficiently.

FAQ’s

What types of transactions are commonly carried out using RTGS?
RTGS is mainly used for high-value transfers such as large business payments, government-related transactions, interbank settlements, and major purchases like property transactions.

Can RTGS be done without using an RTGS cheque?
Yes. An RTGS cheque is not mandatory. RTGS transfers can be completed through online banking channels such as internet banking or mobile banking.

What if I enter incorrect beneficiary details?
RTGS transfers are processed based on the account number entered. If the account number is correct, the funds will reach that account even if the name is wrong. If the account number is incorrect, the money may be credited to the wrong person, making it difficult to recover.

Can I perform an RTGS transaction from a non-home branch?
No. RTGS requests submitted at a branch must be made at your home branch for security and fraud-prevention purposes.

Can I receive compensation if my refund is delayed after a failed RTGS transaction?
Yes. If either the credit to the beneficiary or the return of funds to the sender is delayed, the bank must compensate the affected customer with penal interest.

Is it possible to schedule an RTGS transfer for a future date?
Yes. Many banks allow customers to set up scheduled RTGS transfers in advance through internet or mobile banking.

Can RTGS be used for transfers within the same bank?
Yes. RTGS can be used for transfers between two accounts in the same bank, provided both accounts support RTGS transactions.

What is a UTR number in RTGS?
The UTR (Unique Transaction Reference) number is a unique alphanumeric code assigned to every RTGS transaction, used to identify and track the payment.

What is the full form of RTGS?
RTGS stands for Real-Time Gross Settlement, meaning transactions are processed individually and settled instantly in real time.

Can an RTGS transaction be cancelled?
No. RTGS transactions cannot be cancelled after initiation because the settlement happens immediately.

Are RTGS payments final and irreversible?
Yes. Once a transaction is settled in the RBI’s system, it is final and cannot be reversed.

Is RTGS available on Sundays and bank holidays?
Yes. RTGS operates 24×7 throughout the year, including weekends and public holidays.

What is the minimum and maximum amount allowed in RTGS?
The minimum transfer amount is ₹2,00,000, and there is no maximum upper limit.

How long does an RTGS transaction take to reflect in the beneficiary’s account?
Funds are usually credited within a few minutes, as RTGS works in real time.

Can NRIs use RTGS for transfers within India?
Yes. NRIs holding NRE/NRO accounts can use RTGS for domestic high-value transfers.

Do banks charge for RTGS transactions?
Most banks do not charge for online RTGS transfers. However, branch-initiated RTGS may attract small charges as per bank policy.

Is RTGS safer than other payment methods?
Yes. Since RTGS is regulated by the Reserve Bank of India and uses secure channels, it is considered one of the safest modes for large-value transfers.

What happens if an RTGS transaction fails?
If a transaction fails, the amount is reversed back to the sender’s account, typically within one hour, depending on bank systems.

Can a joint account holder initiate an RTGS transfer?
Yes. Any authorised holder of a joint account can initiate an RTGS transaction, depending on the account’s operational mode.

Does RTGS work for international payments?
No. RTGS supports only domestic fund transfers within India and cannot be used for cross-border transactions.