Scrip less deals

A new electronic system to settle inter bank transactions will come on line as scheduled next month with new interest free liquidity support offered by Central Bank.
Bank officials say that an Intra day Liquidity Facility (ILF) will be made available to banks in settling their dues on the new Real Time Gross Settlement system.rn

rnThe system that will come on line early next month will be able to settle inter bank transactions as and when they happen unlike the present manual system which only settles the accounts at the end of the day.rn

rnldblquote The Central Bank will be crediting the accounts of the participants with this facility during the day but you have to provide security to the Central Bank,
dblquote says Dr. Ranee Jayamaha, Assistant to the Governor at the Central Bank.rn

rn”We will not be charging interest on that. This particular ILF has to be repaid at the end of the day. That would encourage more transaction to come into the RTGS system – particularly high value transactions,” she says.rn

rnGovernment debt issues will also be made scrip less as part of the electronic upgrade of systems at the Central Bank.rn

rnHowever, the passing of a key piece of legislation could delay the de-materialisation of new and issued scripts according to officials.rn

rnldblquote We are unable to issue scrip less securities or convert existing scrip securities into scrip less securities without the Law -the Dematerialisation Law being passed by the parliament,
dblquote Jayamaha says.rn

rnldblquote The Cabinet has approved it. We feel by end of October the Law will be passed,
dblquote she says. rn