What does RTGS stand for?

The term RTGS stands for Real-Time Gross Settlement. This refers to a system used for large scale financial transactions that enables the immediate transfer of funds between banks in real-time. In an RTGS system, transactions are settled on a gross basis, meaning each transaction is processed individually, without netting them against other transactions. This facilitates the swift and secure settlement of large-value payments, reducing credit risk and providing certainty in the transaction process.

The importance of real-time settlement lies in the ability for financial institutions to immediately credit the payee's account, which enhances liquidity and efficiency in the payment system. This system is commonly used by central banks and provides a critical infrastructure for settling high-value interbank transactions.

Other choices do not accurately represent any established payment system. They either confuse terms or use incorrect phrasing that does not align with financial terminology associated with payment systems and bank settlements.