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What Is Real-Time Gross Settlement (RTGS) ?

Wednesday, February 9, 2022

/ by Admin

 Real-Time Gross Settlement (RTGS) 

The term real-time gross settlement (RTGS) refers to a funds transfer system that allows for the instantaneous transfer of money and/or securities. RTGS is the continuous process of settling payments on an individual order basis without netting debits with credits across the books of a central bank. Once completed, real-time gross settlement payments are final and irrevocable. In most countries, the systems are managed and run by their central banks. Key Takeaways  Real-time gross settlement is the continuous process of settling interbank payments on an individual order basis across the books of a central bank.  This system's process is opposed to netting debits with credits at the end of the day.  Real-time gross settlement is generally employed for large-value interbank funds transfers.  RTGS systems are increasingly used by central banks worldwide and can help minimize the risks related to high-value payment settlements among financial institutions

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