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One step closer to T+1 settlement — Banks can use RTGS for customer deals

Our Bureau

Mumbai , Aug. 16

THE Reserve Bank of India has said that the Real Time Gross Settlement system has been enabled for `Straight Through Processing' at the bank's end for putting through customer transactions.

This will enable banks to directly credit the customers account without any manual intervention, upon receiving the credit advice and also help facilitate the introduction of the T +1 settlement in respect of stock exchanges, said a press release.

Thirty-two out of the 72 banks, that are participants in RTGS system, offer customer related RTGS fund transfer services through 840 branches in 134 major centres across the country, accounting for bulk of banking business in the country.

RBI has said that the receiving bank is under an obligation to credit the beneficiary customer's account within two hours of receiving the credit notification at its payment systems gateway.

RBI's Real Time Gross Settlement System, which went live on March 26, 2004 was initially, open to the settlement of inter-bank transactions. From April 29, 2004, the RTGS System has been open also for the settlement of customer transactions.

RTGS is a `Systemically Important Payment System' and covers the banking and financial sector in the country. It is a secure electronic fund transfer system, providing real-time on-line settlement for inter-bank transactions and customer-based inter-bank transactions of any amount across the country, said the release.

All the scheduled banks in the country can be RTGS participants and provide this electronic fund transfer facility to their customers. Currently, there are 72 banks participating in the RTGS System for inter-bank settlement, accounting for more than 90 per cent of the total value of inter-bank settlement in Mumbai.

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