RTGS: Customer Transactions, not to be routed in Interbank Session, warns Reserve Bank of India.

            RTGS: Customer Transactions, not to be routed in Interbank Session, warns Reserve Bank of India.

                         In RTGS, there are two types of Transactions 01) Customer and 02) Interbank Transactions.

            Customer transactions refer to those types of transactions, wherein the beneficiaries customer’s account, in the Beneficiary Bank is directly to be credited.

             Interbank Transactions refer to those types of transactions, wherein the Beneficiary is a bank, and internal accounting entries are effected, to the respective bank department.

            The Operating Session for Inter-bank, is longer than the Operating Session for Customer transactions,.

            Ideally, customer transactions, are not to be routed through inter-bank session, as the RTGS credit has to be afforded within 90 mintues, or  be returned back.

In the initial stages, when RTGS was evolving, Banks use to route customer transactions, in inter-bank session also.

             However, this practice, was being followed, even after Reserve Bank of India, extended considerably, the window for the Customer Session, vide its notification, RBI/2008-09/362, DPSS (CO) RTGS No.1288/04.04.002/2008 – 2009, dated January 28, 2009.

           The reasons could be: A) Accommodate High-Value Clients. B) Technical reasons, viz system failure of the respective Sending Bank, during Customer Session.

            Reserve Bank of India, has sought to plug the practice of routing customer transactions, in inter-bank session, through it’s Notification:- RBI/2008-09/476 DPSS (CO) RTGS No.1959/04.04.002/2008-2009, dated  11^th May, 2009.

The said notification, can be accessed at http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=4982&Mode=0                                      

 Reserve Bank of India, vide its above Notification, warned banks of penal actrions, in case customer payments are routed through inter bank session.

QUOTE:-

All RTGS participants are, therefore, advised to strictly adhere to the RTGS procedural guidelines and desist from the practice of pushing customer transactions in the inter-bank mode. ''Violations, if any, brought to our notice would be viewed seriously and would attract penalty under Section 30 of the Payment and Settlement Systems Act, 2007(51 of 2007),'' the Circular said.

UNQUOTE