RBI launches new money transfer system; SMEs to benefit
Mumbai, Oct 19 (KNN) The Reserve Bank of India, today launched the new Real Time Gross Settlement (RTGS) system which will make it easier for customers to transfer money from one bank to the other through online transactions, helping particularly the small enterprises and individuals.
Launching the new RTGS, RBI Governor Raghuram Rajan said, its advanced liquidity and queue management features are expected to significantly improve the efficiency of financial markets. He hoped the new RTGS system would be such a driver for India's financial system.
Reportedly the first in the world to be built on ISO 20022 messaging standards, the new RTGS system is highly scalable and will have several new functionalities. These include advance liquidity features, including gridlock resolution mechanism and hybrid settlement facility, facility to accept future value dated transactions, options to process multi-currency transactions, etc.
The RTGS system is a large-value funds transfer system which banks use to settle interbank transfers for their own account as well as for their customers. It was first implemented in India in March 2004 as a major technology based electronic funds transfer system across the country. The system facilitates customer, inter-bank payment on a ‘real’ time and on gross basis. The system also facilitates settlement of Multilateral Net Settlement Batch (MNSB) files emanating from other ancillary payment systems.
The RTGS infrastructure is critical in facilitating the orderly settlement of payment obligations. The role of central banks as operators of large-value payment systems is important in the context of the broader role of the central bank in a nation’s financial system insofar as it offers “safety net” attributes by providing final settlement in central bank money, the RBI said in a release.
With implementation of the new RTGS system, the existing RTGS system will cease to be operational. Further, the “RTGS System Regulations 2013” would replace the RTGS (Membership) Business Operating Guidelines, 2004 and RTGS (Membership) Regulations, 2004, it added. (KNN/PC)