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Frequently Asked Questions (FAQs) on RTGS Payments to DICGC

Q.1 What is RTGS System?Ans The acronym “RTGS” stands for “Real Time Gross Settlement”. It is an electronic

settlement system where processing and settlement take place on an order-by-order

basis (without netting) in real time (continuously- not in batch processing mode). Considering that fund transfers takes place in the books of the Reserve Bank of India, the

payment is taken as final and irrevocable. This is a legally valid mode of payment in India

under Information Technology Act, 2000 as also under Regulation 23 of the Deposit

Insurance and Credit Guarantee Corporation General Regulations, 1961.

Q.2 How RTGS is different from Electronic Fund Transfer System (EFT) or NationalElectronics Funds Transfer System (NEFT)?

Ans EFT and NEFT are electronic fund transfer modes that operate on a deferred net

settlement (DNS) basis which settles transactions in batches e.g 6 times a day on week

days and 3 times on Saturdays . In DNS, the settlement takes place at a particular point

of time subject to availability of fund. All transactions are held up till that time. Any

transaction initiated after a designated settlement time would have to wait till the next

designated settlement time. Contrary to this, in RTGS, transactions are processed

continuously throughout the RTGS business hours and the payee‟s account is credited on

the same day.

Q .3 Is there any minimum / maximum amount stipulation for RTGS / NEFTtransactions?

Ans. Intended primarily for large value transactions, the minimum amount to be remitted

through RTGS is Rs.1 lakh with no upper ceiling for RTGS. No minimum or maximum

stipulation has been fixed for EFT and NEFT transactions.

Q.4 What is the time taken for effecting funds transfer from one account to anotherunder RTGS?

Ans. Under normal circumstances, the beneficiary branches are expected to receive the funds

in real time as soon as funds are transferred by the remitting bank. The beneficiary bank

has to credit the beneficiary's account within two hours of receiving the funds transfer

message.

Q.5 Would the remitting customer receive an acknowledgement of fund credited to the

beneficiary's account?

Ans Under RTGS, the remitting bank receives a message from the Reserve Bank that money

has been credited to the receiving bank. Based on this the remitting bank can advise the

Part I - General



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remitting customer that money has been delivered to the receiving bank. This can be

supported by a Unique Transaction Reference (UTR) Number which serves as reference

for the transaction in future.

Q.6 Would the remitting customer get back the money if it is not credited to the DICGCaccount? When?

Ans Yes. It is expected that the receiving bank will credit the account of the beneficiary

instantly. If the money cannot be credited for any reason, the receiving bank would have

to return the money to the remitting bank within 2 hours upon which the original debit

entry in the customer's account is reversed.

Q.7 Till what time RTGS service window is available?

Ans With effect from January 28, 2009, the RTGS service window for customer's transactions

is available from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 12.30

hours on Saturdays. For inter-bank transactions, the service window is available from

9.00 hours to 18.00 hours on week days and from 9.00 hours to 14.40 hours on

Saturdays.

Q.8 Is there any way that a remitting bank can track the premium remittance?

Ans It would depend on the arrangement between the insured bank paying premium and the

remitting bank. Some banks with internet banking facility provide this service. Once the

funds are credited to the account of the beneficiary bank, the remitting customer gets a

confirmation from his bank by arrangement.

Q.9 What about Processing Charges/Service Charges for RTGS transactions?

Ans As per RBI directions, the banks can levy the following charges for RTGS remittances

(outward) effective from October 8, 2008:

(a) Rs.1 to 5 lakh : Maximum of Rs.25 per transaction

(b) Rs. 5 lakh and above : Maximum of Rs. 50 per transaction

{ For NEFT (outward) remittance trasactions, the charges are :

Rs.1 to 5 lakh : Maximum of Rs. 5 per transaction (a) Rs. 5 lakh and above : Maximum of Rs. 25 per transaction }

Q.10 Do all bank branches in India provide RTGS service?

Ans No, all the bank branches in India are not RTGS enabled. Presently 99 banks provide the

facility through more than 52,000 branches. The list of such branches is available on

RBI website http://www.rbi.org.in/Scripts/Bs_viewRTGS.aspx (or the link “For Bankers”

from the home page). You can also check with your banker about availability of the

service.

http://www.rbi.org.in/Scripts/Bs_viewRTGS.aspx





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Q.11 Does an insured bank have an option to use or not to use RTGS / NEFT or otherelectronic modes for paying deposit insurance premium?

As per RBI (DPSS) circular No. 2007-08/375 dated June 20, 2008, all payments above

Rs.10 lakh by RBI regulated entities in the RBI regulated markets would have to be

mandatorily routed through electronic payment systems like the RTGS,NEFT, ECS with

effect from August 1, 2008. Therefore, payment of deposit insurance premium by insured

banks for Rs.10 lakh or more through mode other than RTGS / NEFT/ ECS etc.might

amount to non-compliance with RBI guidelines on payment and settlement.

Q.12 What about the payment of premium below Rs.10 lakh to DICGC ?

The insured banks are advised to make payments between Rs. 1 to Rs. 10 lakh through

RTGS / NEFT in their own interest. Some banks may be having past experience of

frequent return of „At Par‟ cheques by a few drawee banks, delay in transit, sudden

holidays / strike etc. which resulted in levying of penal interest (@ Bank Rate + 8 %) on

certain occasions. Such instances can be avoided by use of electronic mode of payment.

Some of the advantages of paying through RTGS area as follows:

- More efficient fund management by the insured bank by scheduling the remittance for

enjoying the „float‟ till the date of actual fund transfer unlike pre-funded arrangements.

- Various operational risks associated with physical instruments are eliminated.

- Same day confirmation by the originating RTGS branch about credit of the amount toDICGC Account.

- The risks associated with return of the instrument in clearing by the drawee bank is also

avoided which has proved costly for many banks in the recent past.

- Sometimes, the postal / courier agencies do not deliver packets at the DICGC on

Saturdays presuming it to be a weekly holiday whereas the services of banking business

such as receipt of premium remains open on Saturday if it is the last date of receipt of

premium. This might obviously result in charging additional interest to the insured bank

which can be avoided by use of RTGS / NEFT mode.

Q.13 What will be value date for the deposit insurance premium sent through RTGS ?

Ans The date of credit of the account of the Corporation will be considered as the date of

premium payment.

Q.14 Is there any way the bank paying premium through RTGS records the remittance?

Ans In addition to the confirmation from the remitting banker, the DICGC would also be

issuing a separate acknowledgement on receipt of the Credit. The corresponding UTR

Number has to be mentioned by the insured bank in the relevant field in the DI-01 Return

being sent to DICGC that will complete the transaction recording.

Part II - Payment to DICGC



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Q.15 What is the essential information that the remitting premium paying bank wouldhave to furnish to a bank for the remittance to be effected?

Ans The premium-paying bank has to furnish the following information to a bank for effecting a

RTGS remittance:

1. Amount to be remitted

2. Account number of the Premium paying bank which is to be debited

3. Name of the beneficiary (i.e Deposit Insurance and Credit Guarantee

Corporation – DICGC)

4. Name of the beneficiary customer (i.e Deposit Insurance and Credit

Guarantee Corporation – DICGC)

5. Sender to receiver information (i.e the name and DICGC Registration No. of

the insured bank paying the premium through the RTGS branch along with

remarks on purpose such as ‘Premium for HY Sep. 2009’ / ‘Interest on

Premium Default’ etc.)

6. The IFSC of the receiving branch (i.e DICG0000001)

(IFSC stands for Indian Financial System Code. It is an addressing code in user- to-user message transmission used for all sort of electronic money transfer. The code gives a specific identification figure to the branches of the banks. The code consists of 11 Characters - First 4 characters (4!A) represent the entity; Fifth position has been defaulted with a '0' (Zero) for future use; and the Last 6 character (6!X) denotes the branch identity.)

Q.16 What if the information in the ‘sender to receiver information’ is not furnished by

the premium paying non-RTGS bank or not entered up by the RTGS originatingbranch in the manner prescribed above.

Ans In case of the „sender to receiver information‟ is incomplete or blank, it may be difficult for

DICGC to immediately identify and give credit to the insured bank on whose behalf the

premium is paid. This is the single most ground for delay in issue of receipt / assessment

advice to the insured banks paying premium though another RTGS-enabled bank branch.

Although the remitting bank may mention that the said information is not mandatory, the

insured banks are advised to ensure entering this information in their own interest.

Q.17 What if the RTGS enabled bank mentions that they are unable to find the name ofDeposit Insurance and Credit Guarantee Corporation (DICGC) in their PartcipantInterface (PI) module?

Ans When a new member is added to the RTGS system, all participants receive a Participant

Code Change Notification. This notification updates the local (PI) database with the code

of the new member but does not update the bank and branch details. This update

ensures that message validation occurs at the PI. After this notification is received, the

bank/branch details have to be added using the Organisation Code Maintenance option in

PI, to make the use of the IFSC easier. The aforesaid problem arises in case the

database updation has not taken place with DICGC IFSC details or the details have not



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been added using Organisation Code Maintenance Option in PI. The RTGS enabled bank

may have to contact their own RTGS Helpdesk (at Data Centre) or RBI RTGS Help Desk

on telephone or email for immediate assistance.

Q.18 If any steps have been taken by DICGC / RBI to facilitate such transactions?

A few of the recent specific steps initiated by RBI / DICGC are as follows:- The RBI has taken steps to expand vastly the network of RTGS-enabled bank so that

there may be such a branch close to you.

- The RBI has extended the customer window (i.e business hours) of the RTGS enabled

banks commensurate with RBI business sessions.

- The RBI has issued instructions to provide RTGS facility to customers of RRBs

sponsored by respective banks.

- The RBI (DPSS) had convened a meeting of senior officials of banks which generallyextend „At par‟ cheque facilities to co-operative banks on January 5, 2009 and isturcted

that such banks may persuade and facilitate RTGS payments of deposit insurance

premium by co-operative banks and discourage payments through Cheques / DDs.

Q.19 Whom can I contact, in case of non-credit or delay in credit to the DICGC or anyrelated issues / assistance ?

Ans Contact your bank / branch. If the issue is not resolved satisfactorily, the DICGC can be

contacted on the following telephone / mail IDs.Telephone No. (022) 2306 2161, 2302 1158, (Direct)

(022) 2308 4121 (Ext. No. 2223, 2225, 2228

Fax No. (022) 2301 5662

(022) 2301 8165

Email [email protected]

(Working Hours of DICGC Monday to Friday 10.00 hours to 17.45 hours)

Document Updated on : February 24, 2009

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