Official Question UPSC 2025
Consider the following statements in respect of RTGS and NEFT: I. In RTGS, the settlement time is instantaneous while in case of NEFT, it takes some time to settle payments. II. In RTGS, the customer is charged for inward transactions while that is not the case for NEFT. III. Operating hours for RTGS are restricted on certain days while this is not true for NEFT. Which of the statements given above is/are correct?
Solution & Analysis
Answer: A
Based on current Reserve Bank of India (RBI) operational guidelines for digital payment systems:
•Statement I is Correct: RTGS (Real-Time Gross Settlement) processes transactions continuously and instantly on an individual order basis. NEFT (National Electronic Funds Transfer) processes transactions in half-hourly batches, creating a slight time lag for settlement.
•Statement II is Incorrect: To promote digital transactions, the RBI mandated that inward transactions (receiving funds) must be absolutely free of charge for customers across both RTGS and NEFT platforms.
•Statement III is Incorrect: While historically true, the RBI upgraded the infrastructure. As of December 2019 for NEFT, and December 2020 for RTGS, both systems are operational 24x7x365, including all holidays and weekends, with no restricted hours.