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Advantages and disadvantages of RTGS

RTGS stands for real-time gross settlement, it is a facility provided by the banks. This enables funds to be transferred instantly and fully from one bank to another and from one location to another. Which is on an individual order basis. So here this article gives the advantages and disadvantages of RTGS to better understands this topic.

Pros or Advantages of RTGS:

  1. RTGS is one of the safest as well as the fastest mode of interbank transfer.
  2. It is a paperless transfer of funds.
  3. There are no additional charges levied for RTGS transactions.
  4. The beneficiary is not required to visit the bank, to deposit the money.
  5. The funds can be transferred using the internet banking service.
  6. This facility is available on all business days, whose timings may vary from bank to bank.
  7. It is an immediate fund transfer mechanism.
  8. RTGS is now available 24*7 from Monday to Sunday.
  9. RTGS facility can be availed either online through mobile or internet banking or offline through the bank branch.
  10. It does not involve any credit and settlement risk for the recipients as every transaction is settled instantly.
  11. The customers are enabled to predict the cash flow by knowing when their account will be credited and debited.

Cons or Disadvantages of RTGS:

  1. RTGS does not provide the facility to track the transaction to its customers. As only the provide confirmation is implemented by the central bank. In which the remitting bank gets a message of fund transfer to the beneficiary bank, from the central bank.
  2. RTGS is that the gross system has the gridlock risk that does not have enough money.
  3. The minimum amount that can be remitted through RTGS is Rs 2 lac with no upper limit.
  4. The RBI of India has only implemented the positive confirmation in which the remitting bank receives a message of fund transfer to the beneficiary bank from the RBI.

Thank you for reading this article. If you have any queries regarding our article on the advantages and disadvantages of RTGS then do comment in the comment section below.


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