|
|
 |
 |
 |
| Monday, 13 September 2004 |
 |
|
 |
Business | |
| News Business Features Editorial Security Politics World Letters Sports Obituaries
|
RTGS ensures safety and efficiency by Rose Matilda Siriwardhana, Director, Payments and Settlements Department, CBSL Continued from last week The RTGS System has changed the payment and settlement infrastructure. Has it improved the way the banks, the Central Bank and the Primary Dealers doing their business? The Central Bank, as the operator and a major participant of the RTGS System automated its own internal systems which handles its banking operations, foreign exchange transactions, open market operations Government Securities transactions and General Ledger System in advance to integrate the operations with the new RTGS System. Therefore, manual operations have ceased bringing in considerable efficiency gains. Participating banks shifted their large value payments namely the call money, forex and government securities markets which were settled through the Current Account Settlement System, SLIPS and cheque clearing systems to the RTGS system. The payments made by banks on behalf of their corporate customers have marked a significant change with the introduction of the RTGS system. Some banks have extended their on-line banking services to customers permitting them to make their payments through RTGS System even without visiting the bank to submit payment instructions. The operating hours for third party customer payments have been extended upto 3.00 p.m. enabling banks to accommodate more of such payments. This has helped to reduce the use of float of funds of corporate customers by the banks. The new system has helped the participating institutions to monitor the position of their settlement accounts on real time basis. At the commencement of the RTGS System, the real time monitoring and intraday liquidity management was a challenge to participants but it has now proved to be a very useful tool to improve cash and risk management. Impact of the RTGS system to the financial system stability The RTGS System is being operated by the Central Bank with a high degree of security and operational reliability. The service availability of the system is about 99.7 per cent and is on par with the system availability of most of the RTGS Systems in operation in developed countries. Accordingly, the RTGS System has reduced the operational risks and increased efficiency of the payment and settlement system in particular and the financial system in general thus enhancing the public and investor confidence in the financial system. The RTGS System has proven how efficient and reliable its operations are. It has also helped the Central Bank to reliably forecast the money market liquidity and carry out Open Market Operations more effectively to implement its monetary policy. The certainty of settlement of large and critical payments has facilitated greater predictability for cost effective re-use of funds by major players in the financial markets as well as their customers, exerting a favourable impact on the economy. There is no room in the RTGS System to pass the settlement risk from one participant to another or to spread such risks beyond the RTGS system and its participants threatening the stability of the national payment system. The RTGS System has become the main artery of the Sri Lanka's payment system ensuring safety and efficiency of operations in the call money and government securities markets facilitating the smooth functioning of the financial system. To be continued next week |
|
News | Business | Features
| Editorial | Security
Produced by Lake House |
