Full Form of RTGS

Updated on March 19, 2024
Article byWallstreetmojo Team
Edited byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Full-Form Of RTGS?

The full form of RTGS, real-time gross settlement, is the real-time (continuous) settlement of the funds (interbank payments) that transfers on an individual basis without netting that is on an order-by-order basis. Usually, one uses it for transferring money/securities from one particular bank to the other in real time.

Full Form of RTGS

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This instant transfer system has evolved from the telegraph-based fund transfer of the US and has brought about a huge revolution in the world of finance, and its use has been growing. In most countries, the central bank manages it and is commonly used for transactions of high value. However, once the process is complete, it cannot be reversed.

Full-Form Of RTGS Explained

Just as the name suggests, the full form of RTGS in bank explains the process of Real Time Gross Settlement, which means the funds are settled immediately, whenever they are transferred. As soon as the sending bank gives an intimation to the receiving bank regarding the money transfer, the process is done.  

In this particular procedure, each transfer intimation is handled as a separate case and settled separately, instead of grouping them together. Thus, this avoids multiple transactions being bunched up and the risk of transactions getting omitted is reduced. The overall transfer time is also greatly reduced since the process happens within a very short time period. However, the settlement is irrevocable and final.

The process explaining the full form of RTGS in bank, started in mid 1980s buy later on many banks adopted and implemented this system making the transfer very fast and secured. This helped not only individuals but also the corporates who had to deal with payments of huge amount which required a fast payment system. It is very close to the telegraph system that was used by the US Federal banks to transfer funds long back. However, this system is a joint contribution of UK and France.

Primarily, the central banks of all countries handle and monitor this system because it is an integral part of the banking and financial market. Therefore, the central bank has to ensure that it is not only efficient, but also secured, and time saving since it connects the markets with the corporates and individuals. If this system is not maintained properly, financial resources will be mis utilised, leading to risk of financial loss, lack of participation from all members of the market and loss of trust. Funds will not be mobilised for better performance of all sectors.

Over the years, the benefits of this system have instilled confidence among innumerable countries to use it and hopefully the others, who have still not done so, will do it in the coming years.

Why We Need RTGS?

Various reasons justify the need for the full form of RTGS in banking terms, which is real-time gross settlement:

#1 – Minimization of Risks

Real-time gross settlement systems are increasingly used by Central Banks nationally and internationally. RTGS systems help minimize payment settlement risks high in value among banking institutions.

#2 – Protection of Sensitive & Confidential Information

The real-time gross settlements type mechanism even helps protect financial data and mitigate related risks by making it more vulnerable to fraudsters and criminals like hackers and social engineers for a limited period.

#3 – Eliminates the Probability of Social Engineering

Real-time gross settlement systems protect banking institutions from threats like phishing and social engineering, where hackers and criminals hack and obtain sensitive data and misuse the same, causing losses like finances and reputation.

#4 – Saves a Hell Lot of Time

RTGS system is the fastest interbank payment facility available through various banking channels, nationally and internationally.

#5 – Irrevocable

This facility which justifies the full form of RTGS in banking terms, is meant solely for large-value transactions. The payments made in real-time gross settlement mechanisms are final and irrevocable.

#6 – Zero Forgery

In real-time gross settlement systems, all the processes are online, meaning there is hardly any threat of money getting stolen or forgery concerning cheques.

#7 – Better Management of Business Capital

RTGS systems help the organization better manage its business capital.

#8 – No Counter-Party Default Transactions

There are bare minimum possibilities for counterparty defaults.

#9 – Saves Paperwork

The real-time gross settlement can be without any physical documentation and paperwork. Therefore, one can make huge sums of transfers instantly without any paperwork.

#10 – Ensures the Smoother Flow of Operations for Companies

The RTGS systems make it easy to transfer a huge sum of money. All and all, it allows companies to operate smoothly.

#11 – Develops a Better Buyer-Supplier Relationship

With RTGS, one can transfer a huge amount of payments quickly and easily, eliminating the possibility of delayed payments and helping establish a profound buyer-supplier relationship framework.

#12 – No Amount Cap

The real-time gross settlement transfers/transactions have no amount cap.

#13 – Individual Basis

One can execute RTGS transfers/transactions individually.

#14 – Gross Basis

Organizations can execute RTGS transfers/transactions on a gross basis.

#15 – Reliability

Real-time gross settlement systems are highly reliable.

RTGS transfers/transactions have legal backing.

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The customer at the remitting front needs to furnish information to a banking institution while initiating an RTGS transaction. The prerequisites of the real-time gross settlement are below:

  1. The total amount used for remitting purposes
  2. The account number to debited
  3. The beneficiary bank details, such as its name, branch name, etc.
  4. The IFSC code of the branch is supposed to receive the RTGS
  5. Beneficiary customer’s details (name, account number, etc.)
  6. In case there is any other information that needs to be shared by the sender with the receiver.

RTGS Timings

Transaction TimingsRTGS
Monday to Thursday9.00 AM to 4.30 PM
Friday to Saturday9.00 AM to 2.00 PM
All SundayClosed
  • The real-time gross settlement does not work 24*7 hours. The system operates on all the days when most financial institutions operate, including Saturdays. Therefore, one can execute RTGS transfers/transactions only during certain banking operational hours.
  • RTGS transfers/transactions occur from 9.00 a.m. to 4.30 p.m. during the weekdays (excluding national holidays) and from 9.00 a.m. to 2.00 p.m. during the weekends (Fridays and Saturdays).
  • RTGS transfers/transactions might be a little restrictive for individuals who miss the designated time slot for the day. In such a case, the individual must wait for the next working day to make their payments.


Let us take an example to understand the concept of full form of RTGS transactions. We assume that a customer, who runs a retail business, has to send money from the business account of their bank to another account in another bank for investment purpose. The amount to be transferred is Rs. 3,00,000, which is quite a high value. Thus, the best way for them is to use RTGS, which is safe and instantaneous. In any other way, the transfer may take time up to a few days. RTGS will facilitate it immediately.

Limits Of RTGS?

Real-time gross settlement transfers/transactions are primarily for high-end transactions (large value transactions). The minimum amount to be remitted for real-time gross settlement is ₹200,000, while the maximum amount is not applicable.


RTGS transfers/transactions are usually free of cost. It is entirely to encourage the use of digital transactions. However, to charge or not depends on the banks. Many banking institutions have seen charging their customers for RTGS transfers/transactions. The amount these banks charge is very basic and usually depends on the amount to be remitted. In the case of inward transactions, there is no fee or charges levied, while in the case of outward transactions, the fee depends on the total amount to remit. This amount is pre-decided, and it differs from range to range.

Thus, the following points should be noted in case of full form of RTGS transactions:

  • Real-time gross settlement transactions are a credit-push system, which means the transactions are to be initiated solely by the remitter/payer/sender for transferring or remitting funds to the beneficiary customer (receiver).
  • RTGS transactions occur in real-time and based on the transaction (i.e., without netting).
  • Real-time gross settlement transactions are quick and save a lot of time. This system also minimizes or eliminates the possibilities of data manipulation and ensures data protection. RTGS transactions are final and irrevocable.
  • RTGS systems are safe, secure, and reliable for transferring funds. Real-time gross settlements happen for free; however, few banks may choose to charge a minimum fee for executing such transactions.
  • The remitting customer must provide details like his name, account number, amount, date, name of the bank and branch, IFSC code of the beneficiary branch, and name and account number of the receiving customer (beneficiary) for successfully making a remittance.
  • One must do real-time gross settlement transactions within the bank timings, or the receiver and the sender must wait for the next working day to make a remittance.

Full Form Of RTGS Vs Full Form Of NEFT

The above are widely used forms of payment transfers in the financial market. But there are some noteworthy differences between them, which are as given below:

  • The full form of the former is Real Time Gross Settlement whereas the full form of the latter is National Electronic Fund Transfer. The former is settled individually, not in batches, but the latter is always settled in batches, or many transactions are grouped together for settlement.
  • The former can be used only when the minimum amount to be transfers is ₹200,000, whereas the latter does not specify any minimum amount.
  • In case of the former, the transfer is instant and immediate. But for the latter, the transfer takes place every half-hour, not immediate.
  • The former is used only for transactions that are of very high value because of the minimum amount. This is not the case for the latter, in which small amount can also be transferred comfortably.

Thus, both have their own pros and cons. Which method is to be selected will depend on the type of requirements. However, it is always important to note the features of both, so that they can be used appropriately as an when needed.

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This article is a guide to what is the Full form Of RTGS. We explain its pre-requisites, timings along with example, limits, charges & difference with NEFT. You may refer to the following articles to learn more about finance: –

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