What is the Full Form of RTGS?

RTGS stands for Real-Time Gross Settlement, a system for transferring large sums of money from one bank account to another in real-time. It is typically used for high-value transactions that require immediate clearing and settlement.

 

How RTGS Works

• Immediate Transfer: Funds are transferred and settled individually and immediately.

• Gross Settlement: Each transaction is settled individually without netting debits with credits.

• Central Bank: Operated by the central bank of a country to ensure security and reliability.

Benefits of RTGS

• Speed: Provides instant transfer of funds, making it ideal for urgent transactions.

• Security: High level of security and reliability, reducing the risk of fraud.

• Efficiency: Enhances efficiency in financial transactions by eliminating delays associated with other transfer methods.

Uses of RTGS

• Business Transactions: Commonly used for large business transactions requiring immediate payment.

• Government Payments: Used by governments for various high-value disbursements.

• Interbank Transfers: Facilitates interbank transfers for large sums, ensuring quick settlement.

Limitations of RTGS

• High-Value Transactions: Generally used for transactions above a certain threshold, making it less suitable for small amounts.

• Banking Hours: Transactions can only be processed during the operational hours of the bank and the RTGS system.

 

PYQs On RTGS

 

Q. What is the full form of RTGS?

Ans. The full form of RTGS is Real-Time Gross Settlement.