The Governor of the Reserve Bank of India (RBI), Shaktikanta Das in its Statement on Development and Regulatory Policies said that the Real Time Gross Settlement System (RTGS), used for large value transactions, will be made available round-the-clock from December 2020.
In December 2019, the National Electronic Funds Transfer (NEFT) system was made available on a 24x7x365 basis and the system has been operating smoothly since then.
The large-value RTGS system is currently available for customers from 7.00 am to 6.00 pm on all working days of a week except 2nd and 4th Saturdays of the month.
The RBI Governor said that to support the ongoing efforts aimed at global integration of Indian financial markets, facilitate India’s efforts to develop international financial centers, and to provide wider payment flexibility to domestic corporate and institutions, it has been decided to make RTGS available round-the-clock on all days.
RTGS is the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting). ‘Real Time’ means the processing of instructions at the time they are received rather than at some later time; ‘Gross Settlement’ means the settlement of funds transfer instructions occurs individually, on an instruction by instruction basis.
The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is Rs 2 lakh. There is no upper ceiling for RTGS transactions. Depending on the amount and the time of transfer, the RTGS varies.
India will be one of the very few countries globally with a 24x7x365 large value real-time payment system.
The central bank has also decided to grant perpetual validity for Certificate of Authorisation (CoA) issued to Payment System Operators (PSOs) to reduce licensing uncertainties.
Currently, the RBI issues “on-tap” authorization under the Payment and Settlement Systems Act, 2007 to non-banks issuing Prepaid Payment Instruments (PPIs), operating White Label ATMs (WLAs) or the Trade Receivables Discounting Systems (TReDS), or participating as Bharat Bill Payment Operating Units (BBPOUs).
“To reduce licensing uncertainties and enable PSOs to focus on their business and optimize utilization of scarce regulatory resources, it has been decided to grant authorization for all PSOs (both new applicants as well as existing PSOs) on a perpetual basis, subject to certain conditions,” Mr. Das said.