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Question : The ___________ system allows banks to settle their interbank transactions electronically.

 

Option 1: Real-time gross settlement (RTGS)

Option 2: Automated Teller Machine (ATM)

Option 3: Point of Sale (POS)

Option 4: National Electronic Funds Transfer (NEFT)


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 27th Jan, 2024

Correct Answer: Real-time gross settlement (RTGS)


Solution : The correct answer is (a) Real-time gross settlement (RTGS). 

The RTGS system allows banks to settle their interbank transactions electronically in real-time and on a gross basis. In an RTGS system, transactions are processed and settled individually and immediately upon submission, without any netting or batching. This means that funds are transferred from the sender's bank to the recipient's bank on a transaction-by-transaction basis, with immediate availability and finality of funds.The RTGS system is commonly used for large-value and time-critical transactions, such as high-value fund transfers, large corporate payments, interbank settlements, and government transactions. It provides a secure, efficient, and reliable mechanism for banks to settle their payment obligations electronically, minimizing settlement risk and enabling faster and more accurate financial transactions.

 

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