Ace the AFP Exam 2026 – Boost Your Financial Wizardry!

A real-time gross settlement (RTGS) transaction is considered final when the receiving bank is notified by the RTGS processor. This process ensures that the settlement of funds is processed on a real-time basis, meaning transactions are settled as they occur rather than at the end of a business day or batch processing time.

When the RTGS system processes a transaction, both the debit and credit are executed simultaneously. The notification from the RTGS processor serves as confirmation that the funds have been successfully transferred to the receiving bank, thereby completing the transaction. This notification is crucial because it marks the point at which the transaction has been finalized and the funds are available for use by the receiving bank, ensuring that there is no further risk of reversal.

Other stages of the transaction, such as when the originating bank debits the payor's account or when the receiving bank acknowledges receipt, do not represent finality. These steps are important for the processing of the transaction, but they do not provide the same level of certainty that comes with the confirmation from the RTGS processor.