Becoming the first in the South Asian region, Sri Lanka quote s inter-bank payment and settlement system went live on Monday, with Rs. 119 bn worth transactions settled at the close of trading.
Now generally accepted as international best practice to settle urgent and high value inter-bank payments, the Rs. 900 mn Real Time Gross Settlement System (RTGS), eliminates settlement risks by settling payments in real-time across settlement accounts held at the Central Bank. rn
rnDeveloped by Logica Systems, RTGS instant payment ensures fast, secure and irrevocable settlement of major financial market transactions bringing considerable benefits to the economy. rn
rnBut scripless settlement system (SSS) and depository for government debt was not activated today, due to legal snags.rn
rnSSS allows the banking community to conduct settle gilt-edge securities transactions electronically, reducing risk and costs, and introducing greater levels of security and visibility. rn
rnWhile eliminating the present paper-based transactions of gilt-edge securities, Scripless Settlement will also have a limited presence in the secondary market by aggregating customer accounts with the primary dealers.rn
rnThe Registered Stock and Securities Ordinance which was originally scheduled to have been changed in time for scripless trading to start in on September 08, failed to receive cabinet approval in time. rn
rnldblquote We are hoping to get it off the ground by October 31, dblquote Central Bank quote s Assistant to the Governor, Dr. Ranee Jayamaha said. rn
rnThe infrastructure for the scripless trading and settlement is also ready, though trading can start only after the laws are passed by Parliament, she said. rn
rnBond dealers rely on SWIFT for messaging and Bloomberg terminals for trading. All this has pushed up trading costs.
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Central Bank quote s securities depository will charge Rs. 300 per transaction and SWIFT messaging is expected to cost and additional Rs. 45 to Rs. 60.rn
rnThe second phase will see the Central Bank link up with the stock exchange quote s depository and settle foreign exchange transactions real time.rn
rnThe Central Bank also hopes to link up with other regional Central Bank quote s, during the next phase, Dr. Jayamaha said.rn