Real Time Gross Settlement

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. In most countries, the systems are managed and run by their central banks.

  KEY TAKEAWAYS

• 1.Real-time gross settlement is the continuous process of settling interbank payments on an individual order basis across the books of a  central bank.
• 2.This system's process is opposed to netting debits with credits at the end of the day.
• 3.Real-time gross settlement is generally employed for large-value interbank funds transfers.
• 4.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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