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Q68 (IAS/2025) Economy › Money, Banking & Inflation › Digital currency payments Answer Verified

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?

Result
Your answer: —  ·  Correct: A
Explanation

The correct answer is option A because only statement I is correct.

**Statement I is correct:** NEFT transactions are processed in batches with a possible delay of up to 2 hours[2], while RTGS provides real-time gross settlement with instantaneous transfer. This fundamental difference in settlement mechanisms makes statement I accurate.

**Statement II is incorrect:** RTGS has no charges for inward transactions, but outward transactions may incur nominal fees, especially for transfers exceeding ₹2 lakh[3]. Customers are not charged for receiving money through RTGS, contradicting the claim in statement II.

**Statement III is incorrect:** As per the Reserve Bank of India (RBI), RTGS is available 24x7, including holidays[4], and since December 2019, the Reserve Bank of India (RBI) extended NEFT operating hours to be available 24 hours a day, 7 days a week, and 365 days a year[5]. Both systems now operate round-the-clock, making statement III factually incorrect.

Therefore, only statement I correctly describes the difference between RTGS and NEFT systems.

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PROVENANCE & STUDY PATTERN
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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. Consider the following statements in respect of RTGS and NEFT : I. In RTGS, the settlement time is instantaneous while in case of NEFT, …
At a glance
Origin: Books + Current Affairs Fairness: Low / Borderline fairness Books / CA: 1.7/10 · 8.3/10
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This question is a classic 'Static-Dynamic Hybrid'. Statement I is textbook definition, but Statements II and III rely on specific RBI operational updates (Service Charges and 24x7 availability). If you relied on a 3-year-old book without checking recent RBI 'Master Directions' on payment systems, you would likely mark Statement III incorrect based on outdated knowledge.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
RTGS and NEFT (India): Does RTGS provide real-time, immediate settlement (real-time gross settlement) of customer fund transfers?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > MIndian Financial System Code > p. 196
Presence: 4/5
“The concept of Indian Financial System Code (IFSC) was developed by the RBI. It is an 11-digit alphanumeric code that uniquely identifies a bank branch participating in any RBI-regulated funds transfer system. The IFSC helps to transfer money using National Electronic Funds Transfer (NEFT), Real-Time Gross Settlement (RTGS) and Centralised Funds Management System (CFMS) method. The 11 characters in IFSC are as follows: • First four characters represent the entity ·• Fifth position has been defaulted with a 0 (zero) for future use ·• Last six characters denote the bank branch identity, e.g. ICIC0000438 Ġ”
Why this source?
  • Explicitly names RTGS as 'Real-Time Gross Settlement', linking the term to funds transfer operations.
  • Groups RTGS with NEFT and CFMS as methods used for transferring money, implying its role in customer fund transfers.
Statement analysis

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Statement analysis

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Statement analysis

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Statement analysis

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Statement analysis

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