What is RTGS & IMPS in Banking: Meaning, Full Form, Charges & How It Works
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  • Personal
  • Business
  • Corporate
  • Private Banking
  • Privy League
  • NRI Services
  • Investors

The banking sector has seen transformative changes, especially in the way transactions are carried out. Immediate money transfers, once a luxury, are now a necessity, ensuring individuals and businesses can move funds swiftly and securely. Leading this change are two pivotal systems: RTGS (Real-Time Gross Settlement) and IMPS (Immediate Payment Service). These have streamlined the way we perceive and execute bank transactions, setting new benchmarks for speed and efficiency. If you’re wondering about questions like, “What is RTGS?" or “What is IMPS?”, this blog will answer all your queries.

What is the Meaning, Full Form & Charges of RTGS & IMPS?

So, what is RTGS in banking? RTGS is designed for high-value transactions where the money is transferred from one bank to another in real-time and on a 'gross' basis. On the other hand, IMPS acts as a saviour for those immediate fund transfer needs, even during non-working hours. These methods aren't just technological marvels; they signify the banking sector's evolution and relentless pursuit to offer unmatched convenience to its customers. Notably, financial institutions like Kotak Mahindra Bank stand at the forefront of this revolution, harnessing the power of RTGS and IMPS to provide efficient banking solutions. In a short time, these systems have become indispensable assets to modern banking operations by ensuring quick money transfers.

Also Read- What is Zero Balance Savings Account & Its Benefits

How RTGS & IMPS Works?

Assessing the highly sophisticated workings of RTGS and IMPS, it's evident that these systems are built with precision and efficiency in mind. RTGS operates on a real-time basis, ensuring that as soon as a transaction is initiated, it's processed immediately. This makes it ideal for larger transfers. But what is an IMPS transfer aiming to provide? IMPS, meanwhile, stands out due to its around-the-clock availability. Unlike other methods that might operate within specific banking hours, IMPS ensures money transfers can happen anytime. But speed and availability aren’t the only highlights. Both RTGS and IMPS are backed by robust security measures. They use advanced encryption and authentication protocols, guaranteeing the safety of every rupee transferred.

Differences between IMPS and RTGS

Aspect

IMPS

RTGS

Transfer Limits

Up to Rs 2 lakh (though this might vary by bank)

Usually, for transfers above Rs 2 lakh

Transfer Speed

Almost instantaneous

Processed on a real-time basis, usually within 30 minutes

Operational Timings

24/7, throughout the year

Usually from 7:00 AM to 6:00 PM on working days

Beneficiary Addition Time

Immediate or up to 30 minutes, depending on the bank

Might require a waiting period, often up to an hour

This comparison table underscores the primary distinctions between IMPS and RTGS. While both methods ensure quick and secure money transfers, they cater to different transaction needs and come with their respective operational specifics.

How IMPS and RTGS Facilitate Money Transfers?

Transferring money was once a tedious process, but not anymore. Systems like IMPS and RTGS have transformed the scene. Before you ask us what IMPS is in banking, let’s learn how it operates:

Immediate Payment Service (IMPS):

  • Mobile-Centric: IMPS rides on the mobile wave. No need to stay glued to a computer; just tap on your phone, and you're good to go.
  • No Lengthy Bank Details? Brilliant!: With IMPS, using a Mobile Money Identifier (MMID) coupled with a phone number does the trick. Forget the cumbersome account numbers and IFSC codes.
  • Swift and Sure: Transactions through IMPS? They’re zippy. Real-time transfers without the wait.

Real-Time Gross Settlement (RTGS):

  • For Those Hefty Amounts: RTGS isn’t your typical small transfer tool. It's designed for heavy lifters, often for sums above Rs 2 lakh.
  • On-The-Spot Processing: Real-time means just that with RTGS, but remember, it's a daytime operation, so there are no midnight transfers.
  • Details, Details, Details: You'll need all the beneficiary info on hand – account number, bank, branch, and the works.

The Price Tag for RTGS and IMPS

Sure, convenience comes at a cost, but knowing what's what can save some unwanted surprises. Let’s break down those charges:

The Basics:

  • RTGS: Think of transactions between Rs 2 lakh and Rs 5 lakh, and you're probably looking at a charge ranging from Rs 20 to Rs 30. For transfers above Rs 5 lakh, it might go up to Rs 50.
  • IMPS: For a quick transfer up to Rs10,000 using IMPS, you might be set back by just about Rs 1. What is IMPS payment for amounts above Rs 2 Lakhs? Move amounts beyond Rs 2 lakh, and you may have to pay up to Rs 15. And yes, there's a sliding scale for amounts in the middle.

It’s Not All The Same:

Every bank can have its regulations about charges, too. For instance, Kotak Mahindra Bank is known for special rates for its loyal customers.

Anything Sneaky Like Hidden Charges?

Typically, these figures handle the essentials. However, remain vigilant. The bank might impose additional charges if a transfer affects your balance or leads to an overdraft.

It’s always a good practice to keep up with your bank's fees and charges for making RTGS and IMPS transfers. After all, no one loves surprises when it comes to banking charges. 

Also Read- How to Save Money and Achieve Your Financial Goals

FAQs About RTGS and IMPS

1. What is the minimum amount for an IMPS transfer?

IMPS is super flexible. You can transfer as low as Rupee 1. Yes, just a single rupee! But remember, different banks might have different rules, so it is always worth double-checking.

2. Is IMPS better than other modes of online money transfer?

IMPS is like the superhero of instant transfers. It's available 24/7, and it's quick. Unlike some methods that keep you waiting till the next working day, IMPS doesn’t make you hang about.

3. For which transactions is RTGS best to use?

RTGS is your mate for those significant, bulky transactions. Think anything above Rs 2 lakh. It's real-time, so the money gets moving as soon as you hit send.

4. Are there any charges applicable on online money transfers?

Well, there's no such thing as free transactions. While charges are relatively minimal, they do exist. IMPS might cost you a couple of rupees to around Rs 15, depending on the amount. RTGS charges can range from Rs 20 to Rs 50, especially for high-value transfers.

5. Which mode of payment between NEFT or RTGS is faster?

RTGS takes the gold medal here. It's real-time, remember? While NEFT is no slouch, it operates in hourly batches, so it might have you waiting just a bit. If you want to know what NEFT and RTGS are, read this article to understand your options.

6. What is the RTGS & IMPS limit per day?

For IMPS, you're typically looking at a daily limit of around Rs 2 lakh, but some banks might let you push it higher. With RTGS, since it's designed for hefty sums, there's no upper ceiling. Still, it is best to check with your bank, especially if you're thinking of transferring an amount with more zeroes than you can count.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.