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
