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?

(a) I only
(b) I and II
(c) I and III
(d) III only

The correct answer is (a) I only.

Explanation

Statement I: Correct. This is the fundamental difference between the two systems. RTGS (Real-Time Gross Settlement) means transactions are settled instantaneously (“real-time”) and on a one-to-one basis (“gross”). NEFT (National Electronic Funds Transfer) operates on a Deferred Net Settlement (DNS) basis, where transactions are bundled into batches and settled at intervals (e.g., every half-hour). Therefore, NEFT takes some time and is not instantaneous like RTGS.
Statement II: Incorrect. The Reserve Bank of India (RBI) has mandated that banks cannot charge customers for inward transactions (i.e., receiving money) on either NEFT or RTGS. The statement’s claim that customers are charged for inward RTGS transactions is false.
Statement III: Incorrect. This statement is outdated. As of December 2020, the RBI has made both RTGS and NEFT available 24x7x365 (24 hours a day, 7 days a week, including all holidays). The statement incorrectly claims that RTGS has restrictions while NEFT does not; in reality, neither has operating hour restrictions.

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Key Differences: RTGS vs. NEFT

Here is a quick comparison of the two primary electronic fund transfer systems in India, both managed by the RBI.

Feature	RTGS (Real-Time Gross Settlement)	NEFT (National Electronic Funds Transfer)
Settlement	Instantaneous (Real-time). Settled individually.	In batches (e.g., every 30 mins). Settled in nets.
Minimum Value	₹2 lakh. (Used for high-value transactions).	No minimum limit (₹1 and up).
Maximum Value	No maximum limit set by RBI.	No maximum limit set by RBI (banks may set their own).
Timings	24x7x365 (Since December 2020).	24x7x365 (Since December 2019).
Inward Charges	Free. (Mandated by RBI).	Free. (Mandated by RBI).
Outward Charges	RBI has removed its charges to banks.	RBI has removed its charges to banks.