TIPS (TARGET (Trans-European Automated Real-Time Gross-Settlement Express Transfer) Instant Payment System is a „clearing and settlement“ (CSM) service operated for SEPA Instant Credit Transfers (SCT Inst) by the European System of Central Banks, technically by the German, Italian and French national Bank. Such system is needed to exchange transactions (and money) between financial institutions.
Most banks that are available for SCT Inst are connected to RT1 right now - such as bunq, Sparkasse, HypoVereinsbank, Deutsche Bank (and more). RT1 was the first one, I think „STET“ in france is also used by some banks. RT1 is a CSM operated by the European Banking Association (the „good“ EBA). Funds exchanged here are netted and ultimately settled in central bank money over TARGET.
And that’s where the problem is, if you want to say so: Funds banks have in RT1 are backed by funds on TARGET (you can imagine it like a reservation on a credit card). If you run out of RT1-Liquidity you will have to fund it on TARGET, if you have to much you can also „withdraw it“. BUT: RT1-Funds are not considered for reserve requirements by the banking supervision and so this is „more expensive“ and needs more management.
TIPS-Funds are considered for reserve requirements, although it could be instantly withdrawn during a bank run. It’s a political topic by the E(S)CB.