Podcast
Questions and Answers
In RTGS, the receiver is charged a commission for receiving money.
In RTGS, the receiver is charged a commission for receiving money.
False
What is the primary function of RTGS?
What is the primary function of RTGS?
What is the minimum amount required for a transaction using RTGS?
What is the minimum amount required for a transaction using RTGS?
₹2 lakh
Which of the following statements is true about NEFT?
Which of the following statements is true about NEFT?
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In NEFT, transactions are settled __________ through DNS.
In NEFT, transactions are settled __________ through DNS.
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Match the following banking terms with their definitions:
Match the following banking terms with their definitions:
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Bankers cheque can be encashed in any city.
Bankers cheque can be encashed in any city.
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Who provides the IFSC code to banks in India?
Who provides the IFSC code to banks in India?
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Study Notes
Real Time Gross Settlement (RTGS)
- RTGS allows member banks to transfer money to one another across India.
- Each RTGS member bank is represented by a unique IFSC code.
- The IFSC code is issued by the Institute for Development and Research on Banking Technology (IDRBT) in Hyderabad.
- RTGS transactions are conducted online and require both sender and beneficiary to have IFSC codes.
- Transactions must involve amounts of ₹2 lakh or more, facilitated by the Reserve Bank of India (RBI).
- Funds are debited from the sender’s account and credited to the receiver’s account on the same day once instructions are received.
- Only the sender incurs a commission charge during the transaction.
National Electronic Fund Transfer (NEFT)
- NEFT enables fund transfers between member banks across India via an online system.
- There is no minimum amount restriction for NEFT transactions.
- Transactions may involve transferring amounts up to ₹2 lakh in batches.
- The RBI processes NEFT transactions on an hourly basis.
- Funds are credited to the receiver's account either on the same day or within 48 hours.
- Transactions are settled in batches using the Different Net Settlement (DNS) system.
- A maximum of 10 transactions can be processed in a single batch.
IFSC Code
- IFSC codes help identify NEFT member banks and consist of an alpha-numeric sequence of 11 digits.
- Commissions are typically charged to the sender, except in specific cases where the receiver may not incur charges.
Cash Deposit for NEFT
- Customers can deposit cash for NEFT transactions up to ₹50,000 at their bank.
- NEFT services are accessible to walk-in customers at all NEFT member branches.
Bank Overdraft
- A bank overdraft allows current account holders to withdraw more than their account balance.
- Overdraft facilities may be secured with a self guarantee or pledging assets as collateral.
- Interest is paid only on the overdraft amount utilized, despite a higher allowed limit.
Banker's Cheque (Pay Order)
- A banker’s cheque acts similarly to a bank draft, issued against funds accepted by the bank.
- Pay orders can only be encashed within the city of issue and have a guaranteed payment, ensuring they do not bounce.
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Description
This quiz explores the concept of Real Time Gross Settlement (RTGS) in India, detailing the process of money transfer between banks. It covers essential information like the IFSC code and the role of IDRBT in facilitating these transactions. Test your knowledge of online banking transactions and RTGS mechanisms.
