RTGS

RTGS systems provide immediate finality for high-value payments by processing transactions individually as they are submitted rather than accumulating for batch processing. Central banks typically operate RTGS systems for interbank payments, government transactions, and time-critical commercial payments. RTGS eliminates settlement risk by providing immediate and irrevocable transfer of funds between participants. The systems require participants to maintain sufficient liquidity or access to central bank credit to fund payments throughout the day. RTGS often includes sophisticated liquidity management tools including intraday repos, queuing mechanisms, and optimization algorithms to facilitate smooth payment flow while minimizing liquidity requirements. Modern RTGS systems operate continuously during business hours and integrate with securities settlement systems for DVP transactions.