Real Time Gross Settlement (RTGS) System has been introduced for expeditious settlement of financial market transactions.

An RTGS payment system is one in which payment instructions between banks are processed and settled individually and continuously throughout the day.

This is in contrast to net settlement systems (such as paper-based clearing houses and their more modern electronic equivalents), where payment instructions are processed (“cleared”) throughout the day but Inter-bank settlement (i.e. the movement of the funds between the banks) takes place only afterwards, typically at the end of the day. The attraction of the RTGS systems is that payee banks and their customers receive funds with certainty during the day, enabling them to use the funds immediately without exposing themselves to risk.

RTGS solution aims at being a state-of-the-art solution with the use of the INFINET  (INdian FInanacial NETwork) as the dedicated, secure communication backbone, and Secured Financial Messaging System (SFMS), as the secure messaging system.

All the messages will be received by the Inter-bank Funds Transfer Processor (IFTP) –  a component of the RTGS system, at RBI. The IFTP with safe-store the message and, in case of payment messages, construct a settlement message, containing only the data required for settlement by stripping-off the commercial/ customer data and will forward Central System and the fate of the settlement message is advised to the IFTP. Based on the response received, IFTP enriches the message received from the RTGS system by adding back the corporate details and sends the settlement advice to both the originating and beneficiary participant (s), in case of successful settlement or the failure advice to the originating participant, in case of failed settlement.

Thus the settlement of financial transactions between the parties takes place expeditiously.

RTGS in IOB

·         Started inter-bank operations with effect from 8th May 2004.

·         With effect from 28th February 2005, 170 branches are enabled for customer transactions. As on date, 745 branches and extension counters are in the RTGS network.

·         All other networked branches/ extension counters / STAR centers to be covered shortly.

·         Details are available with the branches.

Service Charges for RTGS transactions (both Inward and Outward remittances ) are prescribed as follows.

RURAL:

NON –RURAL:

 Note: If the resultant paise is less than 50 paise it should be ignored. If it is more than 50 paise it should be rounded off to the next higher Rupee.