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UPSC Prelims 2025 GS Paper 1, question 68

Topic: Economy

Q68

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?

  1. (a) I onlyCorrect answer
  2. (b) I and II
  3. (c) I and III
  4. (d) III only

Solution.

Answer: (a) I only

  1. Statement I is correct: Real Time Gross Settlement (RTGS) processes and settles high-value fund transfers continuously in real time on a transaction-by-transaction basis, whereas National Electronic Funds Transfer (NEFT) settles transactions in half-hourly batches.
  2. Statement II is incorrect: under Reserve Bank of India guidelines, banks cannot levy any charges on inward transactions in either RTGS or NEFT.
  3. Statement III is incorrect: both NEFT (since December 2019) and RTGS (since December 2020) operate 24×7×36524 \times 7 \times 365 round the clock on all days of the year.