Part 3/10:
Real-time Gross Settlement (RTGS) allows transactions to be completed instantaneously. For example, when payments are made between banks, they settle immediately in central bank money, reducing the risk of accumulation of unpaid debts.
Batch Net Settlement, on the other hand, aggregates multiple transactions and settles them at designated intervals. While this method requires less liquidity and minimizes risks, it delays the actual transfer of funds to the recipients.
Each method has its pros and cons, with RTGS offering immediate payment processing and Batch Net requiring patience for reconciliations.