Question

Assertion (A): RTGS transactions are processed immediately.

Reason (R): RTGS transactions can only be performed if the amount to be transferred is equal to or more than ₹ 2 lakh.

Options

• Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is True but Reason (R) is False.

• Assertion (A) is False but Reason (R) is True.

Answer 1

Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).

Explanation:

RTGS transactions are processed immediately because it is a real-time gross settlement system that settles each transaction as it is initiated, without waiting for batching. This ensures instant transfer of funds. On the other hand, RTGS transactions are allowed only for amounts of ₹ 2 lakh and above as per RBI rules, ensuring that only high-value transactions use this system. However, the condition of a ₹ 2 lakh minimum limit is not the reason why RTGS is instant; the real-time processing is due to the system’s design. Therefore, both the Assertion and Reason are true, but the Reason is not the correct explanation of the Assertion.