Real Time Gross Settlement (RTGS) System   

Real Time Gross Settlement (RTGS) System

 

 General Information:

Commercial Banks in Pakistan hold accounts at the State Bank of Pakistan to perform settlement amongst them as well as to meet certain regulatory requirements.

Each Bank holding account at SBP is issued with a paper cheque-book which is used to withdraw/transfer funds from its account. The paper cheques are presented physically at SBP counters until 1:30 pm each day by Commercial Banks' treasuries to settle their payment obligations against other banks. SBP then passes the necessary journal entries to debit the remitting bank and credit the beneficiary bank and completes the activity by the end of day. SBP is the final settlement agent for the large value interbank market, govt securities market and the eventual net settlement of the retail cheque system. Thus the type of settlements taking place at SBP is vital to the smooth functioning of the financial system.

The existing system is based on manual book keeping procedures which is not only inefficient but also prone to various types of risk affecting the overall efficacy of the banking system.

State Bank of Pakistan (SBP) is now in the process of introducing a Real-Time Gross Settlement (RTGS) system for large value payments in the interbank market whereby Banks holding accounts at SBP would be able to operate their accounts in real time from their own premises via computerized network between SBP and the participating Banks. Under the new arrangements Banks would be able to settle their transactions affecting their accounts at SBP (e.g. interbank lending/borrowing) immediately after the terms of the transaction have been agreed and executed between the Banks. The ability to make the final settlement of funds in real time would necessitate that the Bank sending a debit instruction must have sufficient balance available in its account before the funds transfer takes place. In other words the account can not go into negative at any time during the day.

At times Banks may be facing temporary shortage in their account creating need for a mechanism to obtain liquidity for a short period during the day i.e. intraday liquidity. This need is usually catered for by the Central Bank through availability of intraday repos, collateralized lending etc. In case the Bank is unable to replenish its account with the required liquidity, the transaction is queued in the system until the required liquidity becomes available.

CMA Small System AB of Sweden is implementing RTGS at State Bank of Pakistan

Reference: http://www.cma.se/companies/companies_IT.html

 Reference Documents:

Legal

General

 FAQs (Frequently Asked Questions):

FAQ’s are underdevelopment and will soon be available here.

 Contacts:

Prism Help Desk
prismhelp@sbp.org.pk

Syed Sohail Javaad (Project Manager RTGS)

Email: sohail.javaad@sbp.org.pk

Mr. Shahid Rabbani (Joint Director)

Email: shahid.rabbani@sbp.org.pk

 



© 2008 State Bank of Pakistan. All Rights Reserved.
Disclaimer | Instructions


State Bank of Pakistan
I.I. Chundrigar Road, Karachi, Pakistan.
Phone: 111-727-111, Fax: (+92-21) 9212433 - 9212436
www.sbp.org.pk