[sbinews] RBI launches instant settlement system (Business Standard)

  • From: rs.pai@xxxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Mon, 29 Mar 2004 09:16:58 +0600 (IST)

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Banks to settle in real time 
RBI launches instant settlement system 
(Business Standard)
Our Banking Bureau in Mumbai 
Published : March 27, 2004 

In a paradigm shift for the Indian banking industry, the real-time gross 
settlement system (RTGS) was finally launched on a live platform today by the 
Reserve Bank of India (RBI). 

With this ? among other things ? clearing of funds through cheque payments, 
which took two to three days earlier, will be instantaneous, and executed 
online. 

All inter-bank transactions and treasury operations have been shifted to the 
RTGS platform today in the first phase. 

Customer-related fund transfers will be shifted to RTGS in due course. 

As per the programme, after about two weeks, more banks and primary dealers 
will join the system in a phased manner depending on their preparedness, 
especially on the technical side. 

It is expected that all prospective participants will join the system in about 
three months. 

RTGS has been one of the prime initiatives of the RBI to reduce risks, 
especially of the settlement and systemic kind, in payment systems. 

It is a mechanism for settling inter-bank transactions on a gross basis online 
at real time. 

Four had banks participated in a pilot run. During this period, as a measure of 
abundant caution, RTGS, the policies, procedures, security and other aspects 
were also subjected to a review by an external group of experts. 

In order to fund the shortages during the day, the RBI has also agreed to 
provide intra-day liquidity at a nominal cost. 



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