In October this year, the Reserve Bank of India had announced that the Real Time Gross Settlement System (RTGS), which is put into use for large value transactions, will be available round-the-clock from December 2020. This will be a big shift considering the fact that earlier it could only be used between 7 am and 6 pm on all working days of a week, barring second and fourth Saturdays of every month.
Shaktikanta Das, the governor of the Reserve Bank of India (RBI), announced this development and said that customers will now be able to avail round-the-clock availability of Real-Time Gross Settlement (RTGS) System.
RTGS is essentially a financial transaction system, using which the customers can opt for continuous and real-time settlement of fund transfers. These funds can be done individually or even on a transaction basis. All the transactions that fall under RTGS transfers have no amount cap. It is meant for large-value instantaneous fund transfers and it takes place on a real-time basis. Every transaction is settled individually in case of RTGS.
RTGS system is expected to reduce default and settlement risk. It will facilitate settlement of AePS, IMPS, NETC, NFS, RuPay, UPI transactions on all days of the week instead of five days earlier.
The RBI governor went on to say that this has been done in a bid to support the ongoing efforts which is aimed at global integration of Indian financial markets. He also said that this would facilitate India’s efforts to develop international financial centres which will be able to provide wider payment flexibility to domestic corporate and institutions. With RTGS being made available round-the-clock on all days, there will be more flexibility for a wider-payment ecosystem.
“With this, India will be one of the very few countries globally with a 24x7x365 large value real-time payment system,” Das had said after the meeting of the Monetary Policy Committee (MPC).
From July 2019, RBI had ceased levying charges on transactions which were made through NEFT and RTGS in a bid to promote digital transactions across the country.