The central bank is launching real time gross settlement (RTGS) with an aim to settle high-value cheque payments in real-time from Thursday.
The Department of Payment System at Nepal Rastra Bank (NRB) confirmed the installation of the necessary software and mechanism to make the payment system more efficient.
Currently, the banking institutions take up to two days to clear and settle a cheque that is issued by one bank and deposited at another. But the RTGS once comes into operation will make clearance and settlement of high-value cheques within a few seconds. “The central bank has already inked the agreement with 28 commercial banks for the operation of RTGS,” the department informed, adding that it is also planning to ink the agreement with development banks and also other financial institutions by December.
Nepal Clearing House Ltd (NCHL) – a public company established jointly by central bank, and banks and financial institutions (BFIs) – is handling all works related to clearing and settlement of cheques, using electronic cheque clearing system, at present.
But after the RTGS is fully implemented, customers will even be able to make payments without issuing cheques, the department said, adding that the RTGS users will later on be able to fill up a form in their respective bank permitting transfer of funds to the targeted recipient without issuing cheque.
Until the system is fully implemented, the central bank is allowing payments through both cheques and RTGS but issuing a cheque or settlement form without sufficient balance in the account and intentionally signing off with a wrong signature will be blacklisted, according to the new directive.
While Connect IPS – operated by NCHL – has also been providing real-time settlement services, there are some difficulties in settlement of large amounts of money.
The central bank, has earlier announced that settlement of amounts between Rs 200,000 and Rs 2 million will have to be made through the RTGS or cheque system but the settlement of any amount above Rs 2 million will have to be mandatorily made through the RTGS.
The Department of Payment System at Nepal Rastra Bank (NRB) confirmed the installation of the necessary software and mechanism to make the payment system more efficient.
Currently, the banking institutions take up to two days to clear and settle a cheque that is issued by one bank and deposited at another. But the RTGS once comes into operation will make clearance and settlement of high-value cheques within a few seconds. “The central bank has already inked the agreement with 28 commercial banks for the operation of RTGS,” the department informed, adding that it is also planning to ink the agreement with development banks and also other financial institutions by December.
Nepal Clearing House Ltd (NCHL) – a public company established jointly by central bank, and banks and financial institutions (BFIs) – is handling all works related to clearing and settlement of cheques, using electronic cheque clearing system, at present.
But after the RTGS is fully implemented, customers will even be able to make payments without issuing cheques, the department said, adding that the RTGS users will later on be able to fill up a form in their respective bank permitting transfer of funds to the targeted recipient without issuing cheque.
Until the system is fully implemented, the central bank is allowing payments through both cheques and RTGS but issuing a cheque or settlement form without sufficient balance in the account and intentionally signing off with a wrong signature will be blacklisted, according to the new directive.
While Connect IPS – operated by NCHL – has also been providing real-time settlement services, there are some difficulties in settlement of large amounts of money.
The central bank, has earlier announced that settlement of amounts between Rs 200,000 and Rs 2 million will have to be made through the RTGS or cheque system but the settlement of any amount above Rs 2 million will have to be mandatorily made through the RTGS.
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