IT professionals and analysts Saturday identified efficient treasury management and awareness creation as the main challenges to fully exploit the benefits of proposed Real Time Gross Settlement (RTGS) system in the banking sector.
The RTGS, set to be launched on October 8 next, will enable the banks to settle, especially the high value transactions, between two banks and/or customers within few seconds, officials said.
The views came at a seminar titled "Real Time Gross Settlement (RTGS)" at a city hotel.
Subhankar Saha, executive director of Bangladesh Bank (BB), was the chief guest while K.M. Abdul Wadood, general manager, Payment Systems Department of BB, was the special guest at the seminar, jointly organised by the central bank and CTO Forum Bangladesh.
Khandaker Ali Kamran Al Zahid, BB's deputy director, presented a key-note paper at the programme while its panel discussion was addressed by S.M. Mainuddin Chowdhury, deputy managing director of Southeast Bank, Dr Ijazul Haque, head of IT, Commercial Bank of Ceylon PLC, Md Shah Alam Patwary, CIO of Mutual Trust Bank, Md Rahat Uddin, senior system analyst at BB, and Himadri Shekhar Sarder and Md Mashiuzzaman, its system analysts.
Moderated by Tapan Kanti Sarker, president of CTO Forum, the seminar was also addressed by Mostafa Shamsul Islam, managing director of Flora Ltd that supported the event.
Due to lack of awareness, some discussants said, they could not harness full advantage of the Bangladesh Electronic Funds Transfer Network (BEFTN) system.
As such, they strongly emphasised on creating awareness among both the bankers and the clients about RTGS to make it successful.
"For lack of awareness, we could not fully utilize the BEFTN system," Dr Ijazul Haque said.
Echoing him, Mr Mainuddin said, "Creating awareness among the bank officials and the customers, especially the businesses, are the main challenges (to successfully implement RTGS)."
He also stressed on disseminating impacts, to be made by the system in the business, among the clients.
As the payments will be settled instantly from one bank to another, some discussants said, the banks will need to manage its treasury more efficiently to maintain any shortfall in liquidity within the respective day.
Some banks might face lack of liquidity and some others might witness excess fund while settling the payments instantly under RTGS, Mr Saha said.
Apart from efficient liquidity management, he also advised the banks to appoint a RTGS manager and an alternative manager in each bank.
"We need to create awareness for successful implementation of RTGS system," Mr Wadood said.
In a query, he further said that selection of software vendor, if necessary, is discretion of the respective banks that can choose it maintaining global standard and applying their own cost analysis.
In his presentation, Mr Zahid said, "Treasury management is one of the main challenges (in RTGS) to meet any shortfall in liquidity every second."
He also expressed the need for creating awareness among the banks' officials and customers.
Mr Zahid also said that only those branches that have core banking solution (CBS) would be eligible for being under RTGS.
And RTGS will not be meaningful at the branches that do not have online services as the clienteles will need to go to the branches physically, which is against the spirit of the system.
Mr Zahid advised the banks to ensure online services at their maximum branches. Otherwise, the customers might switch to other banks having such facilities, he warned.
Mr Rahat Uddin said that if the banks' CBS software can generate MX message, they no longer need to install additional software.
Otherwise, they will need to modify the existing software to enable it to convert the message type from MT to MX, he said.
A BB official, however, said that the local vendors might be better choice as they are available for any modification and/or reinstallation of the respective software.
md.ali.du@gmail.com
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