Payment Systems: NEFT, RTGS, IMPS and UPI
beginner24 min read
The four everyday electronic fund-transfer rails in India: how RTGS (real-time gross) differs from NEFT (deferred net), what IMPS and UPI add, who operates each, and the legal and institutional backdrop - the PSS Act, 2007 and NPCI.
What you will be able to do
- Explain gross versus net settlement and how RTGS and NEFT embody each.
- State the operator and key features of NEFT, RTGS, IMPS and UPI.
- Describe what UPI adds on top of IMPS.
- Place these systems under the PSS Act, 2007 and identify NPCI's role.
What is inside this lesson
- 1Gross settlement and net settlement
- 2RTGS
- 3NEFT
- 4IMPS
- 5UPI
- 6The legal and institutional backdrop
- 7Common confusions
- 8Quick revision
- 9Worked example: choose the payment system
- 10Practice
Get Pro for full access. This is section 1 of 10; the rest of the lesson opens with Pro at onelystop.in/upgrade.
Gross settlement and net settlement
Two ways an interbank payment can be settled:
- Gross settlement: each transaction is settled individually and finally, one by one, in the books of the central bank, the moment it is processed. No transaction waits for another.
- Net settlement: transactions are collected over a period, and only the net amount each bank owes or is owed is settled at set times. It is cheaper and needs less liquidity, but each payment is final only when the batch settles.
RTGS uses gross settlement in real time. NEFT uses deferred net settlement in batches.
The lesson itself is for members
Reading the 10 sections above is free. A free account opens the first 2 topics of every subject in full, along with flashcards and private notes.