Write notes on RTGS system and …

1) RTGS : RTGS is a system of interbanking settlement of transactions conducted among different banks on real time and gross basis. Real time settlement means settling transactions at the time when they take place; there is no time lag between transactions taking place and their settlement. Gross basis involves settling all transactions individually without matching any transaction with another. In RTGS system, every bank along with the Central Bank is linked electronically. Whenever any transaction takes place between two banks, it is settled by the RTGS system. A bank may know its liquidity position at any time during the transaction hours.
2) NEFT: NEFT is a nationwide system that facilitates individuals and organisations having bank accounts to transfer funds from their accounts electronically to individuals and organisations having any other bank accounts. However, the intending funds transferor must be authorised by the bank for this. For transferring the funds, the transferor may either use his own electronic resources (computer network). However, branches concerned (transmitting branch and receiving branch) must have NEFT facility. There is no limit on the amount of transfer of funds from the accounts.