In a major development, the Reserve Bank of India (RBI) today announced round-the-clock availability of Real Time Gross Settlement System (RTGS). The RBI Governor Shaktikanta Das, while announcing the decisions of the new Monetary Policy Committee (MPC), said that this facility will be made effective from December 2020 and will be available on all days of the year.
“To support the ongoing efforts aimed at global integration of Indian financial markets, facilitate India’s efforts to develop international financial centers and to provide wider payment flexibility to domestic corporates and institutions, it has been decided to make available the RTGS system round the clock on all days,” Das said.
Das said that this decision will put India among very few countries to have 24x7x365 large value real time payment system.
The large-value RTGS system is currently available for customers from 7 am to 6 pm on all working days of a week (except 2nd and 4th Saturdays of the month).
The term real-time gross settlement (RTGS) refers to a funds transfer system that allows for the instantaneous transfer of money and/or securities. RGTS 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. Like most countries where this facility is managed by the Central Bank, RTGS in India is managed by the RBI.
In December 2019, the banking regulator allowed National Electronic Funds Transfer (NEFT) system on a 24x7x365 basis and the system has been operating smoothly since then, the RBI Governor today said in his speech.
The RBI on has kept the repo rate unchanged on 4 per cent, as speculated by most analysts and experts. It also maintained the accommodative stance while keeping the MCLR and repo rates unchanged too. Addressing the media, RBI governor Shaktikanta Das said that the central bank will keep its accommodative stance at least for this financial year and more, till economic stability is achieved.
RBI’s MPC began its 3-day deliberations on Wednesday. This is the first meeting of the new MPC which was formed after the appointment of three economists – Jayant Verma, Ashima Goyal and Shashanka Bhide.