Instant fund transfer system is starting soon

The Dhaka Times Desk Instant fund transfer system is starting soon. At present there is a wait of at least one day for fund transfer. Once this method is activated, the money will be transferred instantly.

According to online sources, Bangladesh Bank has taken the initiative to introduce a new method to complete the transfer of funds between banks immediately. The new project named 'Real Time Gross Settlement or RTGS' will be implemented at a cost of around 16 crore rupees. The project will be implemented with financial support from Asian Development Bank (ADB) and technical assistance from World Bank. ADB has already released the grant money. This method is safe in many countries of the world. The World Bank has supported the implementation of RTGS in over a hundred countries.

According to sources, ADB has given 1.7 million 37 thousand dollars out of the money that will be spent on the implementation of RTGS. The ADB funds will be used for hardware and software development of the project. And the World Bank will provide all kinds of technical assistance from its own sources. The cost of running this new system will be borne by the banks. But that cost is said to be very low.

Dasgupta Asim Kumar, executive director in charge of currency management and payment systems department of Bangladesh Bank, said that this system has been initiated to complete inter-bank payments in a short period of time. Once it is launched, all types of high value payments will be completed in a short time in a simple process. The preliminary work of the project has already started. The Central Bank has sent a proposal to the Planning Commission for its final approval. The work will start after getting the permission from there.

Incidentally, Bangladesh Bank has already launched Bangladesh Electronic Fund Transfer Network (BEFTN) and Bangladesh Automated Clearing House (BACH). But there is a difference between RTGS with BEFTN and BACH. Clearing between banks through BEFTN takes place at regular intervals. This method does not pay in real time. Transactions are done on a one-to-one basis through RTGS. On the other hand, netting is done to clear checks of two banks in an automatic clearing house.

An official of Bangladesh Bank said that if the RTGS system is introduced, any type of inter-bank transaction will be able to be settled quickly. Using this method, high value checks or any amount above Rs.5 lakh can be transferred online within seconds. Investments in government securities, buying and selling of secondary bonds, inter-bank money market (Kolmani) transactions will be completed in a short time and risk-free. This will be a mechanism by which shortfalls in cash reserve (CRR) of a bank can be met instantly online. In this case the bank having CRR deficit will be met from the surplus bank. This will be treated as lending to the deficit bank by the surplus bank. And the deficit bank will pay the interest to the supplying bank by calculating the average interest rate of Lenden on the loan of that day. Both banks will benefit from it.

It should be noted that earlier a project called 'Central Bank Strengthening' has been implemented with the financial support of the World Bank. Under that project, Bangladesh Automated Check Clearing House, CIB Online, Online Reporting, Internal Reforms of the Central Bank have been introduced in the banking sector. Initiatives have been taken to implement the RTGS project in that direction. If this is implemented, the banks will reduce the length of the transactions, said those concerned.

Customers can transfer their funds instantly once the system is activated. Because in the system that was in operation until now, one had to wait for two days and then at least one day in the current online system. Money transferred on the previous day could be withdrawn on the next day. Once this system is launched, customers can withdraw the transferred money immediately.