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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. The main benefits of RTGS are its real-time processing, high transaction limit, security, accurate settlement, and instant fund transfer. The major drawbacks of RTGS are that it is costly, complex, not suitable for small transactions, has limited operating hours, and limits its availability.

So here, this article gives the advantages and disadvantages of RTGS to better understand this topic.

Pros or Advantages of RTGS:

Here are some of the 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. In RTGS, there are no geographical limits inside India.
  9. RTGS is now available 24 hours a day, from Monday to Sunday.
  10. RTGS services are available online via mobile or internet banking, as well as offline at a bank branch.
  11. Transactions may be initiated from anywhere using net banking.
  12. It does not involve any credit or settlement risk for the recipients, as every transaction is settled instantly.
  13. While we are using NEFT transactions, there are minimal chances of fraud.
  14. RTGS transactions are extremely safe and secure. Since they are performed within the banking system, which has strong security protocols in place.
  15. Customers can predict cash flow by knowing when their accounts will be credited and debited.
  16. RTGS has been designed for big-value transactions; hence, transaction limits can often be high. This makes it appropriate for transmitting large amounts of money.

Cons or Disadvantages of RTGS:

Here are some of the disadvantages of RTGS:

  1. RTGS does not provide the facility to track the transaction to its customers. Only the provided 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 methods are more costly than other electronic payment methods, such as NEFT.
  3. RTGS indicates that the gross system is at danger of blockage due to insufficient funds.
  4. The minimum amount that can be remitted through RTGS is Rs 2 lac, with no upper limit.
  5. The process of establishing an RTGS transaction can be more complex than that of another electronic payment system, requiring additional information and documents.
  6. The RBI of India has only implemented positive confirmation, in which the remitting bank receives a message of fund transfer from the RBI to the beneficiary bank.
  7. Your transaction will not be processed until you provide the beneficiary’s name, account number, account type, IFSC code, and bank name.
  8. One significant disadvantage is that funds transferred via RTGS cannot be cancelled.
  9. RTGS is open during specified hours on business days, typically from morning until late afternoon.
  10. Another drawback of RTGS is that not all banks and financial institutions may provide RTGS services, which may limit their availability in specific locations.


The Reserve Bank of India (RBI) processes RTGS (real-time gross settlement) requests relatively quickly. Though the minimum amount for RTGS transactions is Rs 2 lakh, there is no mandate for an upper limit. However, the main benefits of RTGS transactions are that they are controlled by the RBI and are extremely safe, secure, and available throughout the year.

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

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