Context: In a business friendly move, the Reserve Bank of India said that Real Time Gross Settlement System (RTGS), used for large value transactions, will be made available round-the-clock from December.
Background

• In December 2019, the National Electronic Funds Transfer (NEFT) system was made available on a 24x7x365 basis.
• From July 2019, RBI stopped levying charges on transactions through NEFT and RTGS, with an aim to promote digital transactions in the country.

About RTGS

• It enables real-time transfer of funds to a beneficiary’s account and is primarily meant for large-value transactions.
• Real time means the processing of instructions at the time they are received and gross settlement implies that settlement of funds transfer instructions occurs individually.

Significance

• This will facilitate innovations in the large value payments ecosystem and promote ease of doing business.
• This will help in global integration of Indian financial markets and will facilitate India’s efforts to develop international financial centres.
• With this, India will be one of the very few countries globally with a 24x7x365 large value real time payment system.

Difference Between NEFT and RTGS

• When it comes to online banking, two terms are often used extensively: NEFT and RTGS 
• National Electronic Funds Transfer (NEFT) is an online system used for transferring small to large amounts of money from one financial entity to another within India.
• RTGS is meant for large-value instantaneous fund transfers while NEFT is generally used for fund transfers of up to Rs. 2 lakh.
• NEFT is an electronic fund transfer system in which the transactions received up to a particular time are processed in batches.
• Contrary to this, in RTGS, the transactions are processed continuously on a transaction by transaction basis throughout the RTGS business hours.