Real Time Gross Settlement (RTGS) is an internationally accepted system to reduce the settlement risk. It is the centerpiece of an integrated payment system. The settlement happens simultaneously for delivery of payments (in real time) for full value of each payment. RTGS was introduced in India in March 2004. The system permits banks to give electronic instructions to transfer funds from their account to that of another bank. Under this system payment happens only if there is transfer of settlement balances between accounts at the Reserve Bank of India. All payments settled under Real Time Gross Settlement are same within same day. The RTGS system is maintained and operated by the Reserve Bank of India (RBI). In real time gross settlement system (RTGS), both processing and final settlement of funds transfer instruction takes place at the same time and continuously. Transfer of funds is made individually and successively on a gross basis. As it is a real time settlement system, final settlement takes place continuously provided that a payee bank has adequate covering balance.
There are 4 types of membership in RTGS such as Type A, B, C and D
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