Nepal Rastra Bank (NRB) has launched a real-time total agreement (RTGS) in the country from today.
NRB Governor Chiranjibi Nepal and Lord Mayor of London (UK) Peter Estlin together inaugurated the high-value cheque payment system in Nepal by a function held on Monday. UK Aid is technically assisting Nepal for the launch and implementation of the RTGS in Nepal.
“The launch of RTGS will not only ensure the clearance and settlement of high-value cheques within a few seconds but will also curb possible transactions from money launderers and terrorists,” the governor stated.
Machhapuchchhre Bank and Nepal Investment Bank have chosen this method in the banking area for the first time. Yet, the central bank has inked contracts with all 28 commercial banks to use the RTGS.
Before the implementation of this method, banking institutions would take anywhere in a few hours and two days to settle a cheque that is circulated by one bank and deposited at another.
According to the central bank, the RTGS has been made willing for transactions of above Rs 200,000 while transactions of over Rs two million have to mandatorily be made in the RTGS.
Though the central bank has made RTGS compulsory only for commercial banks in the nation at present, it has stated that the RTGS will be performed among development banks and finance organizations in the next few months.
Currently, Nepal Clearing House Ltd, a public company organized together by NRB, banks and financial institutions, with others, is managing all works linked to clearing and settlement of cheques, utilizing electronic cheque clearing system.
After the real-time gross contract system is completely fulfilled, customers will even be able to make payments without distributing cheques. According to Bam Bahadur Mishra, executive director of the central bank, RTGS users will later be capable to fill up a form in their banks allowing the transfer of funds to the targeted recipient, through clearing the need to issue cheques.