Why the timings are changed now?
At present, RTGS transactions can be made from 7.00 am to 6.00 pm on all working days of a week, except second and fourth Saturdays of every month. In order to support the global integration of Indian financial markets, and facilitate India's efforts to develop international financial centres besides offering wider payment flexibility to domestic corporate and institutions, the 24 hours facility has been initiated.
"With this, India will be one of the very few countries globally with a 24x7x365 large value real time payment system," said RBI Governor Shaktikanta Das after the the meeting of the Monetary Policy Committee (MPC).
In fact, from July 2019, the central bank has stopped levying charges on transactions through NEFT and RTGS, with an aim to promote digital transactions in the country.
What is RTGS, NEFT system?
RTGS is usually used to carry out large-value instantaneous fund transfers which happens on a real-time basis. Every transaction is settled individually in case of RTGS.
On the other hand, NEFT is used for fund transfers of up to ₹2 lakh. NEFT and Immediate Payment Service (IMPS) are already available 24x7. RTGS fund transfer happens on a real-time basis. Every transaction is settled individually in case of RTGS. NEFT was made available 24x7 last year. But these fund transfer modes are generally used by individuals.
Meanwhile, the RBI has also suggested giving banking licences to large corporate or industrial houses after necessary amendments to the Banking Regulation Act, 1949. It means that such corporate or industrial houses can take significant stakes, which the Reserve Bank of India had strongly objected to in the past.