What is RTGS & IMPS in Banking: Meaning, Full Form, Charges & How It Works

What is RTGS? RTGS Full Form & Meaning

RTGS, or Real-Time Gross Settlement, is a payment system facilitating instantaneous and secure fund transfers between bank accounts. This method is favoured for high-value transactions due to its real-time processing and individual transaction handling, as opposed to batch processing. RTGS can also be utilised for debit and credit card payments, which are accessible through online banking or by visiting a bank branch. The process involves direct and immediate funds transfer, ensuring timely and efficient transactions.

While RTGS offers convenience, it may entail certain charges, depending on the bank's policies. Despite potential fees, the benefits of RTGS include rapid fund transfers and enhanced security measures.

How RTGS Works?

RTGS operates by facilitating instantaneous and secure fund transfers between bank accounts. When initiating a transfer, the sender provides the recipient's bank account details and the amount to be transferred. The sender's bank debits the specified amount from their account and transmits the transfer instructions to the central RTGS system. The recipient's bank receives the instructions, credits the recipient's account with the transferred amount, and confirms the transaction's completion. This process occurs in real-time, ensuring swift and efficient fund transfers between parties.

What is IMPS? IMPS Full Form & Meaning

IMPS, or Immediate Payment Service, is a banking service for instant money transfers facilitated by the NPCI (National Payment Corporation of India). With IMPS, individuals can send or receive funds instantly and conduct inter-bank transactions using mobile or online banking platforms. One of the key advantages of IMPS is its round-the-clock availability, allowing users to make transactions at any time of day or night. This flexibility makes IMPS a highly convenient and efficient payment service, catering to the needs of individuals and businesses alike. By using IMPS, users can enjoy swift and secure fund transfers, enhancing overall financial accessibility and convenience.

How IMPS Works?

IMPS enables instant money transfers between bank accounts via mobile or online banking platforms. To initiate a transfer, the sender enters the recipient's account details and the amount to be transferred. The sender's bank debits the specified amount from their account and transmits the transfer instructions to the NPCI's IMPS system. The recipient's bank receives the instructions, credits the recipient's account with the transferred amount, and confirms the transaction's completion. This process occurs in real-time, ensuring rapid and secure fund transfers between parties.

How IMPS Facilitate Money Transfers?

Immediate Payment Service (IMPS):

Mobile-Centric Approach: IMPS capitalises on the mobile revolution, liberating users from desktop constraints. A simple tap on their mobile device initiates transactions seamlessly.
Simplified Transaction Process: IMPS simplifies the process by utilising a Mobile Money Identifier (MMID) coupled with a phone number. Say goodbye to cumbersome account numbers and IFSC codes.
Rapid and Reliable Transfers: Transactions via IMPS are rapid and dependable. They unfold in real-time, ensuring prompt transfers without any lag.

How RTGS Facilitate Money Transfers?

Real-Time Gross Settlement (RTGS):

For Larger Transfers: RTGS isn’t your usual tool for small transactions. It's tailored for substantial amounts, typically exceeding Rs 2 lakh.
Immediate Processing: RTGS operates in real-time, ensuring swift transactions. However, it operates during daylight hours, so overnight transfers are not feasible.
Attention to Specifics: To initiate an RTGS transfer, you must have all beneficiary details readily available, including account number, bank, branch, and other pertinent information.

What is the transaction fee for RTGS?

Transaction Amount Range (Rs)	Transaction Charge (Rs)
2,00,000 - 5,00,000	Not exceeding Rs 24.50 (exclusive of tax, if any)
Above 5,00,000	Not exceeding Rs. 49.50 (exclusive of tax, if any)

What is the transaction fee for IMPS?

Transaction Amount Range (Rs)	Transaction Charge
Up to 10,000	Rs 2.5
Above 10,000 - 1,00,000	Rs 5
Above 1,00,000 - 2,00,000	Rs 15

What details are Required to Carry out an RTGS Transaction?

To carry out an RTGS transaction, certain essential details must be provided to ensure seamless fund transfers.

Account number of the beneficiary
Name of the beneficiary's bank
Branch name and address of the beneficiary's bank
IFSC (Indian Financial System Code) of the beneficiary's bank branch
The amount to be transferred
Sender's account details, including account number and IFSC code (for online transactions)

What details are Required to Carry out an IMPS Transaction?

To initiate an IMPS transaction, specific information must be furnished to facilitate swift and secure money transfers.

Mobile number of the beneficiary registered with their bank
Mobile Money Identifier (MMID) of the beneficiary
Account number of the beneficiary
Sender's account details, including account number and IFSC code (for online transactions)
The amount to be transferred

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.

RTGS & IMPS Meaning in Banking: Full Form, Charges & How It Works for Money Transfer?