RBI To Allow 24x7 RTGS Payments From December
The Reserve Bank of India has decided to allow real-time gross settlement, or RTGS, facility round the clock starting December, putting India in a league of a handful of countries offering such 24x7 payments.
“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,” the RBI said in its statement on developmental and regulatory policies.
As of now, users can make online payments via RTGS between 7 a.m. and 6 p.m. on all working days of the week.
In December 2019, the RBI made all transactions through the National Electronic Fund Transfer or NEFT facility 24x7. While NEFT deals with retail fund transfers, the RTGS facility is typically used by companies to transfer large sums of money for payments or repayments.
Vivek Belgavi, partner at PricewaterhouseCoopers India said there is a need for the system to open up to different businesses and their needs.
“Today there are businesses which work the usual 9am to 5pm and those who work at 3am. A 24x7 payments system ensures that the transaction needs of all businesses are met. The only concern would be the unknown unknowns that such a system may throw up, in the form of new types of frauds,” Belgavi said.
When the RBI has extended transaction timing on the NEFT payment system, banks had feared that susceptibility to frauds may rise during off-hours when systems are thinly manned. However, their concerns did not prompt the regulator to review its decision.
“As a system we already have learnings from having a 24x7 UPI and NEFT platform. We can use those learnings to better prepare for any issues which may crop up under the RTGS framework. This is surely a very progressive step by the RBI,” said Navin Surya, chairman, Fintech Convergence Council and a payments sector expert.
According to data available with the RBI for July, banks reported 1.25 crore transactions worth Rs 83.35 lakh crore under the RTGS facility. Under NEFT, banks reported 24 crore transactions worth Rs 19.63 lakh crore during the period.