RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer)

RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer) are electronic payment systems that allow individuals to transfer funds between banks. Both these systems are maintained by the Reserve Bank of India. It is applicable only for money transfer within the country.

What is RTGS?

- The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is Rs 2 lakh. The maximum limit is Rs 10 lakh per day.

Under normal circumstances, the beneficiary branches are expected to receive the funds in real-time as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary's account within 30 minutes of receiving the funds' transfer message.

If the funds are not credited to the beneficiary's account for any reason like the account does not exist, the account is frozen, etc., the funds will be returned to the originating bank within one hour or before the end of the RTGS Business day, whichever is earlier.

What is NEFT?

- National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country participating in the Scheme.

Earlier, the NEFT payment system operated for customers from 8:00 AM to 7:00 PM on all working days except on 2nd and 4th Saturday as banks remain close on that day. However, from December 16, 2019, NEFT works round the clock in 48 half-hourly batches between 00.30 AM to 00:00 AM every day.

Thus, we can say that both RTGS and NEFT are schemes by RBI which allow account holders in the banks to electronically transfer the funds intra-bank. In the case of RTGS, settlement in on a 'Real-Time' basis, whereas for NEFT, the settlement takes place in 48 half-hourly batches.

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