30 January 2010
RTGS stands for Real Time Gross Settlement. RTGS is the fastest money transferring
mechanism between the banks. In RTGS, the transactions are processed and settled in "Real time" and on "Gross" bases. Once the transaction is settled, it is irreversible.
"Real time" means as and when the transaction is processed. There is no waiting time.
"Gross" means the transaction is settled individually without being clubbed with other transactions.
The goals of RTGS are
1. To reduce settlement risk due to settlement lag
2. To reduce credit risk
3. Speed up the process of high value payments
4. To give accurate position of the participating bank
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