RTGSsystem
RTGSsystem stands for real-time gross settlement system, a class of payment systems used by central banks or designated authorities to settle interbank transfers immediately and on a gross basis. In an RTGS system, each transfer is processed in real time and settled individually, with settlement finality typically achieved as soon as the transaction is completed. Because there is no netting against other payments, RTGS systems greatly reduce settlement risk in the interbank market, although they place a premium on available liquidity.
Operation and features: Banks submit payment instructions to the RTGS system, which validates funds, debits the
Scope and role: RTGS systems are typically used for high-value and time-critical interbank transfers, wholesale payments,
Examples: Notable RTGS systems include the Fedwire Funds Service in the United States, CHAPS in the United