RTGSNAVITAS

Amit, Dhananjay,Kushal, R.D.B, Sarat Chandra,

Pradyumna

Real Time Gross Settlement

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

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 - MEANING

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 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 RBIUn-Cleared funds AccountMaintained with Deposit Accounts Department, RBI ,

Mumbai

RTGS PLATFORM

STRUCTURE OF RTGS PLATFORM

CBS A

CBS B

P I P IIFTP

RTGSRBI

Customer’s 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

Process Flow

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

FLOW contd…

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

PRIORITY

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

PAYMENT MECHANISM

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

REPAYMENTS

If the funds are returned then the amount goes to the Un-cleared 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

UN-CLEARED FUNDS

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

CANCELLATION

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

INTRA DAY LIQUIDITY

Amount stipulation Minimum : 2 lakh

Maximum : 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

FEATURES

Electronic Funds Transfer Infrastructure in India – Usage of RTGS

Customer Charges

RTGS Existing Revised 1 lakh to 2 lakhs 25 -

above 2 lakhs to 5 lakhs 25 25 above 5 lakhs 50 50

Thank You