RTGS (Real Time Gross Settlement)

Definition

You've just initiated a Rs 50 lakh payment to a supplier and need it there today, not tomorrow, not in two days. RTGS is your answer. Operated by the Reserve Bank of India, it settles each transaction individually and in real time, with immediate and irrevocable finality. Once processed, an RTGS transfer cannot be reversed. The minimum threshold is Rs 2 lakh (there's no upper limit), which positions it squarely as the channel for large-value business payments, GST tax deposits, TDS payments, property transactions, IPO application money, and inter-corporate fund movements.

Before RTGS went 24x7 in December 2020, businesses had to plan large payments around banking hours. A Rs 15 crore vendor payment that needed to go out on a Saturday? Impossible. Now, RTGS runs 24x7x365, which has been transformative for treasury operations. Each transaction gets a unique UTR (Unique Transaction Reference) number that serves as irrefutable proof of payment. Tax authorities accept UTR numbers as evidence during assessments and appeals. That UTR is your receipt, your audit trail, and your legal proof, all in one alphanumeric string.

The cost is modest relative to the amounts being moved. Banks charge based on amount bands, with internet banking transfers typically cheaper than branch-initiated ones. GST at 18% applies on the bank's service charge. For compliance, RTGS is the mandated channel for several statutory payments above certain thresholds. The bottom line? If you're moving Rs 2 lakh or more and need certainty that it's arrived, RTGS is the answer. Retain the transaction records and bank debit advices, your auditors will want them, and your UTR numbers belong in your tax filing documentation.

Key Points

• RTGS settles individual transactions in real time with irrevocable finality. Minimum Rs 2 lakh, no upper limit.
• Available 24x7x365 since December 2020, no more planning large payments around banking hours.
• Each transaction generates a UTR (Unique Transaction Reference) accepted as legal proof of payment by tax authorities.
• Primary use cases: GST payments, TDS deposits, high-value vendor payments, property deals, and inter-corporate transfers.
• Bank charges vary by amount band and channel (branch vs internet banking), with 18% GST on the service charge.
• Retain RTGS records and debit advices: UTR numbers should be referenced in tax filings and audit trails.