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What is a Real-Time Gross Settlement (RTGS) system, and where is it used?

Real-time gross settlement (RTGS) is a system for the electronic transfer of large or high-value payments. RTGS systems are used by central banks and other financial institutions to facilitate the transfer of large amounts of money between banks and other financial institutions in real time.

In an RTGS system, each payment is processed individually and settled immediately, without waiting for other payments to be processed. This means that RTGS payments are typically faster and more reliable than other types of payment systems, and are often used for time-sensitive or high-value transactions.

To make an RTGS payment, a person or business initiates the payment through their bank or financial institution. The bank then sends a payment instruction to the central bank, which processes the payment and transfers the funds to the recipient’s bank. The recipient’s bank then credits the funds to their account, and the payment is completed.

RTGS systems are typically operated by central banks, and are used by banks and other financial institutions to facilitate the transfer of large or high-value payments. RTGS systems are an important part of the global financial system, and are used extensively for cross-border payments and other financial transactions.

This page was last updated on January 2, 2023.