Kathmandu, June 14
Nepal Rastra Bank (NRB), the central monetary authority, will soon launch a new system, which will enable banks and financial institutions to settle large value cheque payments within a few seconds.
The system, known as real time gross settlement (RTGS), is being installed to make the payment system more efficient, NRB Deputy Governor Chinta Mani Siwakoti told The Himalayan Times.
At present, a person or a firm has to wait for at least a few hours to receive payment if a cheque issued by one bank is deposited at another for clearing and settlement purpose.
Once the new system is installed, clearance and settlement of high value cheques can be performed within a few seconds.
High value currently refers to amount exceeding Rs 100 million. But NRB has said high value can also refer to interbank transactions of any volume.
This means the new system will be used to settle cheque payments of over Rs 100 million and interbank payments of any amount.
But if ordinary clients wish to use the system to settle cheque payments of less than Rs 100 million, they can do so after paying a certain fee. NRB has not fixed the fee yet, but each of such transaction costs around $3 to $4 abroad, according to NRB officials.
Currently, Nepal Clearing House Ltd (NCHL), a public company established jointly by NRB, banks and financial institutions, among others, is handling all works related to clearing and settlement of cheques, using electronic cheque clearing system.
But NCHL offers these services only at certain time of the day.
For instance, large value cheques are cleared only at 11:30am on weekdays. NCHL also offers express clearing service at 11:30am, 12:30pm and 1:30pm on weekdays by levying a certain fee. It also offers regular clearing service at 3:00pm, during which free of cost clearing service is provided for cheques worth less than Rs 200,000.
“NCHL will continue offering these services even after the launch of the RTGS system. But clients seeking speedy service will have the option of tapping the new system,” Siwakoti said, adding, “NRB, not NCHL, will run this system.”
NRB, however, will require a few more months to install the new system, as it is currently in the phase of comparing features of various RTGS software.
“Only around five to seven companies worldwide develop this software. Once we fully understand how different software operate, we will initiate the bidding process to procure the software,” Siwakoti said.
Special features of RTGS
- Will make payment system more efficient
- Once new system is installed, clearance and settlement of high value cheques can be performed within a few seconds
- New system will be used to settle cheque payments of over Rs 100 million and interbank payments of any amount
- Ordinary clients wishing to use the system to settle cheque payments of less than Rs 100 million can do so after paying a certain fee