RTGS — Real Time Gross Settlement — is India's central-bank-operated system for high-value, real-time interbank fund transfers. Maintained by the RBI, it settles each transaction individually and immediately, without netting. The minimum transaction amount is ₹2 lakh; there is no upper limit. RTGS operates on all days the RBI is open, including some Sundays. Unlike NEFT, which batches transactions, RTGS provides instant finality, making it the preferred channel for large-value and time-critical payments.

RTGS stands for Real Time Gross Settlement. Breaking down the name reveals the mechanism: 'Real Time' means transactions are processed the moment the instruction is received, not at the end of a batch window. 'Gross Settlement' means each transaction is settled individually, on a one-to-one basis, rather than being netted against other transactions.

This distinction matters enormously. In net settlement systems (like the older NEFT batches), banks accumulate instructions and settle the net position at fixed intervals. RTGS eliminates intraday credit risk because the transfer is irrevocable and final the moment it is processed — the recipient bank's account at the RBI is credited in real time.

RTGS is operated and maintained by the Reserve Bank of India, which means it runs on the RBI's core infrastructure. The system is designed for large-value transactions: the minimum amount is ₹2 lakh, with no ceiling. This high minimum effectively reserves RTGS for institutional and high-value retail use, while NEFT and UPI serve smaller transfers.

From a monetary policy transmission perspective, RTGS is part of the Liquidity Adjustment Facility (LAF) ecosystem — it is the pipeline through which banks move funds to meet CRR obligations, execute repo transactions, and settle government securities trades. Understanding RTGS also connects to the Payment and Settlement Systems Act, 2007, under which RBI regulates all payment systems in India.