Explained: What is RTGS, How will RBI's decision help consumers?
New Delhi, Oct 09: With the focus was entirely put on RBI's decision to keep the rates unchanged, Governor Shaktikanta Das made another major announcement claming that he has allowed Real Time Gross Settlement (RTGS) payment system to be made available round the clock from December 2020 to make online fund transfer smooth. The facility will be made available for all starting December 2020.
"India will be among very few countries globally with a 24x7x365 large value real-time payment system," the RBI governor said.
What is RTGS?
RTGS or Real Time Gross Settlement is a payment system that refers to funds transfer system that allows for the instant money transfer and/or securities. RGTS is the continuous process of settling payments on an individual order basis without netting debits with credits across the books of a central bank. This payment system has no amount cap.
How will the RBI's decision help consumers?
The Reserve Bank of India's latest decision would help in improving the ease of doing operations, Governor Shaktikanta Das said while announcing the decisions taken by the central bank's Monetary Policy Committee (MPC).
Presently, RTGS is not a 24x7 system. The window is available between 7 am and 6 pm on a working day, for settlement at the RBI end. However, the timings that the banks follow may vary from bank to bank. This mode of payment is used for large value transactions. The minimum amount to be remitted through RTGS is Rs 2,00,000 with no upper or maximum ceiling.
Meanwhile, the RBI on Friday kept the repo rate unchanged on 4 per cent, as speculated by most analysts and experts. It also maintained the accommodative stance while keeping the MCLR and repo rates unchanged too.
Addressing the media, RBI Governor Shaktikanta Das said that the central bank would keep its accommodative stance at least for this financial year and more, till economic stability is achieved.