[sbinews] Cash mgmt will be hit by RTGS: IBA chief (Business Standard)
- From: "Rajendra PAI" <rspai.IT@xxxxxxxxxxxxxx>
- To: <sbinews@xxxxxxxxxxxxx>
- Date: Fri, 28 Nov 2003 14:18:24 +0530
Cash mgmt will be hit by RTGS: IBA chief
Our Regional Bureau in Hyderabad
Published : November 28, 2003
The proposed implementation of realtime gross settlement (RTGS) system shortly
by the Reserve Bank will have a negative impact on the cash management services
(CMS) being offered by the banks, cautioned V Leeladhar, the chairman of Indian
Banks Association (IBA) and CMD of Union Bank of India.
Cash management is a service which enables the corporate customers to manage
their receivables and payables efficiently.
RTGS enables settlement of payment transactions in the Indian financial market
between banks and other financial institutions to ensure real time settlement
of funds.
It integrates settlement of payments taking place under multiple systems such
as inter-bank clearing, high value clearing, MICR clearing and negotiated
dealing system.
High value and inter-bank clearing will be discontinued once RTGS becomes live,
Leeladhar said at a seminar on CMS here, organised by Pune based CashTech
solutions.
As different locations are inter connected in the new system, the utility of
cash management services will be reduced to an extent.
However, CMS will have a role to play as our economy is cheque based and it
will be sometime before the entire nation gets covered. Banks offering CMS will
have to innovate and come out with newer products to remain in the business, he
said.
Raj Subramaniam, the director of CashTech Solutions, said that their company
would soon start offering its solutions in the Chinese market. The company
currently has operations in 15 countries.
It has about 45 customer sites, of which 15 are in India and the rest abroad.
The company earns more than 60 per cent of its revenues from overseas market.
The company launched its next generation cash management platform on Thursday.
It has already bagged an order to implement the solution for an Indonesian
bank.The company claims to have a 40 per cent share of the Indian cash
management software market. Its clients' list includes State Bank of India,
Syndicate Bank and Andhra Bank
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