Presentation on theme: "Real Time Gross Settlement"— Presentation transcript:
1 Real Time Gross Settlement RTGSReal Time Gross SettlementAn Insight……Presentation by S.R.Ramananda,Consultant, IT Solutions
2 Introduction“RTGS” stands for Real Time Gross Settlement. RTGS system is a funds transfer mechanism where transfer of money takes place from one account of one bank to another account of another bank on a “real time” and on “gross” basis.
3 RTGSSettlement 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 one to one basis without bunching with any other transaction
4 Regarding RTGSReal Time Gross Settlement (RTGS) system, introduced in India since March 2004, is a system through which electronic instructions can be given by banks to transfer funds from their account to the account of another bank.The RTGS system is maintained and operated by the RBI and provides a means of efficient and faster funds transfer among banks facilitating their financial operations.As the name suggests, funds transfer between banks takes place on a ‘real time’ basis. Therefore, money can reach the beneficiary instantaneously and the beneficiary’s bank has the responsibility to credit the beneficiary’s account within two hours.
5 Volume and Value of Transactions On a typical day, RTGS handles about transactions a dayApproximate value of turnover Rs.1,50,000 crores per day.33000 branches at more than 3,000 cities/ towns and taluk places are covered under the RTGS system,.
7 Step by Step description of the RTGS process flow Step 1 Customer submits the outward Instruction slipStep 2Scrutiny of Instruction slip (Clear funds, name and a/c no. of customer, IFSC code, signature)Step 3Branch scans the Instruction slip in Staffware & sends it to RTGS Central TeamStep 4Branch will file the slip for the purpose of maintaining recordsStep 5RTGS Central Team executes the transaction in Finacle and Participant Interface (PI) of RTGS
8 Message moves to RBI Server Step 6Message moves to RBI ServerStep 7Bank’s RTGS Settlement Account is debited and Beneficiary Bank’s RTGS Settlement Account is creditedStep 8Beneficiary Bank passes the credit to the beneficiary customer’s account
9 About RTGS…Payment instructions between banks are processed and settled individually and continuously without netting the debits against creditsPayments are processed as per prescribed Timings by RBI (except on Sundays and National holidays across states)Transactions Supported through RTGS presently -Inter-bank PaymentsCustomer PaymentsOwn Account TransfersNet ClearingNDS / CCIL
10 Benefits of RTGS … Secured Online Real Time Funds Transfer To Customers..Secured Online Real Time Funds TransferEliminates problem of debtors delaying their paymentsNo longer the customer have to rely demand draft (DD) / cheque.No more the anxious wait for a week or a fortnight, wondering if the instrument reached safely and was duly realized.Debtor will no longer be able to enjoy the kind of "float" he did by deliberately giving an outstation chequeDebtor will not be able to give "stop payment" instructions to his bank to escape payment.
11 To Economy..RTGS will reduce the systemic risk that exists in the present settlement systems like cascading affect on banks due to failure of one bank to meet it's settlement commitments.It improves confidence of out side agencies like world bank in Indian EconomyIt enables efficient settlements and avoids settlement delays
12 Transaction initiation By person receiving payment COMPARISIONClearing systemRTGSSettlement basisNetGrossTime of settlementAt specified timesOn continuous basisSystem Based onPhysical instrumentsElectronic messagesTransaction initiationBy person receiving paymentBy person making payment.Receipt of fundsDepends on location and clearing typeDay zeroFinality of SettlementOnly after return clearingImmediate, final and irrevocableReturn reasonInsufficient funds, stale instrumentsIncorrect account no., account frozen
13 Charges Charges are fixed Very cheaper compare to the charges o DD and other mode of transfer of fundsFor Corporate Clients:Outward transactions Min Rs.250, Max 1500)Inward transactions:Rs.100 For retail categoryOutward transactionsfor SB :MIN 150 Rs and MAX 1500for Current account :min 250 , maximum 1500 Inward transactions :No Charges
14 Remitting customer has to furnish the following information 1. Amount to be remitted2. His account number which is to be debited3. Name of the beneficiary bank4. Name of the beneficiary customer5. Account number of the beneficiary customer6. Sender to receiver information, if any7. The IFSC code of the receiving branch
15 About RTGS… Limitation: Restriction: - Customer Transactions - >Rs. 1 Lakh – No upper Limit – Targeted for Corporate / Interbank Payments- Interbank Transactions – Re 1 & above – No upper LimitRestriction:- Against Cash – not maintaining account with us- Inward RTGS Credit to parties who are not having account with us
16 Exclusions:Purpose of payment (“Sender to Receiver Info”) is to be captured in the message (AML)Sender Name / A/c No. / Address mandatory in message (KYC)Source of funds mandatory in case of NRI / NRE A/csRBI Payment Gateway cancels any RTGS transaction processed after cut-off time. “Cancellation” of payment is “non-compliance” of RBI guidelinesTransactions cannot be processed on Sunday / National HolidaysAny transactions processed after cut-off time/ Holidays – It throws message “Payment will be effected on next working day”. Branches shall note to inform RTGS Ops to push the same. Without confirmation from Branch, transaction will not be considered settlement on next working day.