DEFINITION of 'Real Time Gross Settlement - RTGS'

The continuous settlement of payments on an individual order basis without netting debits with credits across the books of a central bank.

BREAKING DOWN 'Real Time Gross Settlement - RTGS'

Basically, this is a system for large-value interbank funds transfers. This system lessens settlement risk because interbank settlement happens throughout the day, rather than just at the end of the day.

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