Consider the following statements in respect of RTGS and NEFT:In RTGS, the settlement time is instan

Question

Consider the following statements in respect of RTGS and NEFT:In RTGS, the settlement time is instantaneous while in case of NEFT, is takes some time to settle payments.In RTGS, the customer is charged for inward transactions while that is not the case for NEFT.Operating hours for RTGS are restricted on certain days while this is not true for NEFTWhich of the statements given above is/are correct?

Accepted Answer

Statement I is correct: The acronym 'RTGS' stands for Real Time Gross Settlement, which can be explained as a system where there is continuous and real-time settlement of fund-transfers, individually on a transaction-by-transaction basis (without netting). NEFT is an electronic fund transfer system in which the transactions received up to a particular time are processed in batches. Contrary to this, in RTGS, the transactions are processed continuously on a transaction-by-transaction basis throughout the day. Statement II is not correct: With a view to rationalise the service charges levied by banks for offering funds transfer through RTGS system, a broad framework of charges has been mandated as under: a) Inward transactions – Free, no charge to be levied. b) Outward transactions – ₹ 2,00,000/- to 5,00,000/-: not exceeding ₹ 25/- (exclusive of tax, if any) Above ₹ 5,00,000/-: not exceeding ₹ 50 (exclusive of tax, if any) Statement III is not correct: RTGS is available 24x7x365 with effect from December 14, 2020.