Mumbai, Oct 14 (KNN) The Reserve Bank of India (RBI) will make the new Real Time Gross Settlement (RTGS) system functional from October-19 to facilitate online real-time settlement of payments in banks.

“The new RTGS system will be operationalized on October 19, 2013 and the “RTGS System Regulations 2013” would come into effect from this date. Hence, the extant RTGS System will no longer be operational,” RBI said in a communication to the banks.

The RTGS system would process transactions such as inter-institutional/inter-bank transactions — the transfer of funds between two members/participants —RBI said. It would also deal with customer transactions — funds transfer/receipt on behalf of the customer of an RTGS participant member.

Government transactions like the transfer/receipt of funds on behalf of government accounts by a participating member — would also be carried out.

Mainly, four types of participants use the RTGS system— the central bank, regular participants such as banks, restricted participants such as primary dealers and clearing houses.

“Whereas in the advent of new technology, it is necessary and expedient to set up the new RTGS system for facilitating on-line real time settlement of payments, the RBI has decided to setup a new RTGS system and frame regulations for matters connected therewith or incidental thereto,” added the notification.

The RTGS System will be operated by the Bank under the supervision of the Regional Director of the RBI under which the Bank will constitute a Standing Committee for the management of the RTGS system.

The tenure of members from distinct bank group, other than the Bank shall be for 1 year and shall be substituted by another member of that distinct group each year.

The RTGS service charges has three components - monthly membership fee ranging from Rs 2,000 – 4000, transaction fee ranging from Rs O.10 – 0.50 and time-varying tariff for members ranging from Nil to Rs 10.00.  (KNN/SD)