Gear Up To Participate In RTGS System, Banks Told

Mumbai, Nov 3: | Updated: Nov 4 2003, 05:30am hrs
The Reserve Bank of India (RBI) has urged banks and primary dealers (PDs) to ensure complete readiness in terms of infrastructure, systems and procedures, and adequate trained manpower to effectively participate in the real time gross settlement (RTGS) system.

On intra-day liquidity under RTGS, expecting an increase in requirement of intra-day funds, the RBI mentioned the need for a provision of intra-day liquidity (IDL) to participants for a smooth and timely settlement process. The regulator further stated that it would be providing collateralised intra-day liquidity support to the participants.

A standalone RTGS system is scheduled to be operationalised by January 2004 while in the final stage, a fully-functional RTGS system is expected to be made operational by June 2004. This system would be fully integrated with the integrated accounting system of RBI.

In the first stage, a demonstrable version of the RTGS system has been implemented in June 2003, and hands-on practice was given to the officials of 104 banks, the RBI stated in its policy review.

The RBI has stated that as RTGS services are to be offered by banks through their branch network, it was essential that banks should put in place necessary connectivity between their branches and the payment system gateway through which banks will interact with the RTGS system.

It may be recalled that the central bank had a number of consultations with market participants in respect of criteria for fixation of limits for IDL, eligible collateral and other related issues. In order to facilitate smooth transition to RTGS environment, RBI has advised market participants to devise strategies for efficient cash flow management.