How does RTGS work?

RTGS stands for RealTime Gross Settlement, which is a financial transaction system that allows individuals and businesses to transfer funds between banks in realtime on a gross basis. This means that each transaction is settled individually, without any netting of debits and credits.

To initiate an RTGS transfer, the sender needs to provide the recipient's bank account details, including the account number, name, and IFSC code of the bank branch where the account is held. The sender's bank verifies the details and processes the transaction by debiting the sender's account and transferring the funds to the recipient's account. The transfer is completed in realtime, which means that the funds are available in the recipient's account within a few minutes of the transaction being initiated.

RTGS transactions are typically used for highvalue transactions, such as large business payments, real estate transactions, and government transactions. There is usually a minimum threshold amount for RTGS transactions, which varies from bank to bank. Additionally, there is a fee charged by banks for processing RTGS transactions, which also varies from bank to bank.