The Bangladesh Bank (BB) signed a deal with Sweden-based CMA Small Systems AB Thursday to introduce a Real Time Gross Settlement (RTGS) system by the end of September 2015.
“We’re going to improve the high-value time critical payments in the country introducing the RTGS system,” said BB Governor Atiur Rahman.
The central bank chief said the system will accommodate local currency transactions, government security transactions and domestic foreign currency transactions.
“The RTGS is not only a state-of-the-art payment system but also a tool for mitigating credit and systemic risks in the economy,” he noted.
Subhankar Shaha, executive director of the BB and Alex Nazaroff, managing director of the CMA Small Systems AB signed the agreement on behalf of their respective organisations.
Among others, Deputy Governors of the BB Abul Quasem and Nazneen Sultana, also spoke on the occasion.
Asian Development Bank is providing the financial assistance for implementing the RTGS, according to the BB officials.
The RTGS, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting).
‘Real time’ means the processing of instructions at the time they are received rather than at some later time. ‘Gross Settlement’ means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).