[pullquote]RTGS Limit is now Rs 2 Lakhs[/pullquote]

Reserve Bank of India (RBI) has increased the minimum threshold limit of RTGS (Real Time Gross Settlement) from Rs 1 Lakh to Rs 2 Lakhs which will be in effect from 15th Nov 2010.

Accordingly:

1. The minimum threshold value limit for RTGS transaction will be increased from INR 100,000 to INR 200,000
2. RTGS instructions below the revised threshold value limit would be rejected by the bank
3. You are advised to initiate electronic payments below INR 200,000 through National Electronic Fund Transfer (NEFT) payment mode
4. Customers availing standard pricing for RTGS and NEFT payments would be charged in line with the new RBI guidelines

Following will be the charges:

RBI circular reference: DPSS (CO) RTGS No. 1008 / 04.04.002 / 2010-2011 dated 03 November 2010

If you wonder what exactly is the difference between RTGS and NEFT, then read through:

The acronym ‘RTGS‘ stands for 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 one to one basis without bunching with any other transaction. Considering that money transfer takes place in the books of the Reserve Bank of India, the payment is taken as final and irrevocable.

EFT and NEFT are electronic fund transfer modes that operate on a deferred net settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes place at a particular point of time. All transactions are held up till that time. For example, NEFT settlement takes place 6 times a day during the week days (9.00 am, 11.00 am, 12.00 noon. 13.00 hours, 15.00 hours and 17.00 hours) and 3 times during Saturdays (9.00 am, 11.00 am and 12.00 noon). Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time. Contrary to this, in RTGS, transactions are processed continuously throughout the RTGS business hours.

IFSC Codes post will be useful to know the IFSC codes of different banks in India.

NitiN Kumar Jain

Nitin works in an IT MNC professionally but blogs and owns NKJ Live. He is also the co-owner of a professional start-up ARGHAM BYTES

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