RTGS Time Period Extended
The advent of Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) has changed the dimensions of banking. Both the settlement systems facilitate hassle free and quick transfer of money from one person to another.
To make the settlement system more convenient to the customer, RBI has extended the time window for RTGS. But before we look at the new timings of RTGS and NEFT, we should first know about them.
What is Real Time Gross Settlement (RTGS)?
Real Time Gross Settlement (RTGS) can be segregated in two term Real Time and Gross Settlement. Real Time simply means immediate transfer of money from one bank to another and Gross Settlement means that the transaction is not bundled with any other transaction and happens individually.
However, due to large volume of transactions and slow process of remitting of funds, the real time does not literally means instant; generally time of 2 hours is taken to complete the transfer process.
What is National Electronic Fund Transfer (NEFT)?
National Electronic Fund Transfer (NEFT) is also a payment system which enables one-to-one transfer of money but the movement of money from one bank to another bank is done in batches. And these batches are settled based on Deferred Net Settlement (DNS) on hourly time slots.
Difference between RTGS and NEFT
1. RTGS is done immediately while NEFT is done in hourly batches.
2. NEFT and RTGS both have different timings (Discussed Below)
3. Any amount without any ceiling limit can be transferred under NEFT system while there is a minimum limit of Rs.2 lakhs in RTGS.
4. Different Charges are levied for using NEFT and RTGS which are as below:
NEFT and RTGS New Timings
On 15th December, 2014 Reserve Bank of India has extended the time window of Real Time Gross Settlement (RTGS), leaving time window of National Electronic Fund Transfer (NEFT) intact. These new timings are applicable from 29th December, 2014.
Any transfer accepted after the scheduled time will be carried forward and settled on the next working day.
Further, Bank closes their counter for accepting the transfers 15 minutes before the above time limit as to feed the transactions in the system and to cope up with the upper time limit of RBI.
What if the amount does not get credited?
In case the transactions fails to happen and the transferred amount does not reflects in the beneficiary’s account, then the beneficiary’s bank must reverse the transfer and return money to your bank within 30 minutes of failure. The process of reversal is done quickly in RTGS while time for reversal of transaction could go up to three to four hours in NEFT.