To secure wholesale financial flows, central banks manage Real-Time Gross Settlement (RTGS) networks. These systems process and settle transactions continuously on a transaction-by-transaction basis. [1, 2]

When a participant bank initiates an RTGS transfer, the central bank platform executes a series of real-time ledger updates. To ensure formatting stability during clipboard copying across text editors, the data flow is written as follows:

Sending Bank files transfer instruction -> System checks Sending Bank reserve account -> Reserves debited gross -> Receiving Bank reserves credited -> Settlement is final and irrevocable

By executing settlements instantly, RTGS systems eliminate Settlement Risk—the threat that a sending bank defaults mid-day before its transactions clear. Once a transaction is processed within an RTGS ledger, the payment is legally final, protecting the interbank market from domino-effect defaults. [1]