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| Monday, 9 February 2004 |
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Central Bank implements advanced technology in systems management The Central Bank commenced operation of the integrated RTGS/SSS system last Monday. These systems will bring about changes in the national payment and securities settlement systems of the country. The RTGS system will facilitate large value fund transfers and settlement on an electronic basis in real-time rather than settling at the end of the day. It will expedite fund transfers among banks, primary dealers, financial institutions, investors, customers, the government and the public. This system will also bring about financial discipline in the banking sector since banks will have to maintain adequate cash and reserves in their accounts to meet their payment obligations. The system will update their settlement accounts after each transaction. This will improve the liquidity management of banks. On February 3, the Scripless Securities Settlement module was integrated with the RTGS system. The SSSS, would facilitate the issue of scripless securities and their transfer among investors with a simultaneous settlement of funds through the RTGS on a delivery. Sri Lanka's integrated RTGS/SSSS will be known as "LankaSettle". Since the system will operate electronically and on-line, dealing in government securities will be convenient to all market participants. The Central Depository System (CDS) will be the title registry as well as the custodian for government securities. The ownership of securities will be recorded electronically in the CDS. The holders of scripless securities in the CDS will be issued confirmation of transactions as well as periodic account statements of their holdings. All payments and settlement instructions to the RTGS/SSS system will be sent through the SWIFT communication network which is considered to be the world's most safe and secure communication system. These systems are based on advanced technology and are on par with those already implemented in the developed world. With the implementation of the integrated RTGS/SSS system supported by SWIFT communication technology and coupled with a fully automated and real-time General Ledger system and a Treasury management system, the CBSL is the first in the region to adopt such systems. |
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