RTGS system to cover 20,000 bank branches by June

Mumbai, May 21: The Reserve Bank of India (RBI) has reiterated that the Real Time Gross Settlement (RTGS) system will cover 20,000 branches by end-June.

In its bulletin for May 2006, the apex bank stated that the coverage of the RTGS system has increased significantly, pointing to the fact that by April 13, RTGS connectivity was available in 19,301 bank branches as against a target of 15,000 branches by end-March 2006, an indication that the implementation of the programme is proceeding smoothly and even ahead of schedule.

Given this pace of implementation, it is more than likely that the target of 20,000 bank branches sought to be covered by the RTGS system by end-June 2006, will be easily met.

The RBI bulletin also informed that the new organisation for retail payment systems christened National Payments Corporation of India (NPCI) is likely to commence operations in H2 FY 07.

The NPCI will take over the MICR cheque processing centres (CPCs) as well as the operation of retail electronic payment systems and will focus on creating a nation-wide payments system with secured connectivity.

Giving information about electronic payment products and their status and proposed action, the RBI bulletin stated that the pilot project for cheque truncation system is expected to be implemented in New Delhi by end-December this year. ''This system aims at enhancing efficiency in the retail cheque clearing sector,'' it stated.

Similarly, the proposed National Settlement System (NSS) which aims at settling clearing positions of various clearing houses centrally would be introduced by end-December this year, the bulletin revealed.

The apex bank further informed that the waiver of processing fees for RTGS transactions will continue up to March 31, 2007.

It may be recalled that the RBI had earlier stated that no processing fees would be levied for RTGS and National Electronic Funds Transfer (NEFT) transactions till March 31, 2006.

Now despite the fact that ''there has been a substantial increase in volume of electronic transactions, the Reserve Bank would continue with the waiver of processing fees on banks in order to further promote electronic transactions system,'' the bulletin informed.

The Reserve Bank had earlier also waived processing fees on banks for both electronic clearing service (ECS) and electronic fund transfer (EFT) transactions uptill March 31, 2006, and this waiver too has been continued with till March 31, 2007.

The National Electronic Funds Transfer (NEFT) system for electronic transfer of funds was operationalised in November 2005 and since then, it is being implemented in a phased manner in order to facilitate non-networked branches of banks to transfer funds electronically, pointed out the RBI bulletin.

The apex bank is also currently putting in place a new Centralised Public Accounts Department System (CPADS) software to facilitate processing requirements of the Government accounts maintained with it. This system will also get operational by end-2006, stated the bulletin, adding that this will more efficiently process transactions for the Central and State Governments.

UNI