Real Time Gross Settlement (RTGS) system is a funds transfer mechanism where transfer of money takes place from one bank to another on a "real time" and on "gross" basis. This is the fastest possible money transfer system through the banking channel. Settlement in "real time" means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed.
"Gross Settlement" means the transaction is settled on a one to one basis without bunching with any other transactions. Considering that money transfer takes place in the books of the Reserve Bank of India, the payment is taken as final and irrevocable. The RTGS system is primarily for large value transactions. The minimum amount to be remitted through RTGS is Rs. 2 lacs. There is no upper ceiling for RTGS transactions. RTGS eliminates settlement risk.
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