The country’s commercial banks have begun to conduct foreign currency clearing activities through the Real-Time Gross Settlement (RTGS) system of Bangladesh Bank (BB) from Sunday, opening a new window in the existing payment ecosystem.
Bangladesh Bank Governor Abdur Rouf Talukder officially inaugurated the RTGS program at the headquarters of the central bank in Motijheel on Sunday.
Deputy governors Ahmed Jamal and Kazi Sayedur Rahman, Federation of Bangladesh Chambers of Commerce & Industries President Md Jasim Uddin, Metropolitan Chamber of Commerce and Industry, Dhaka President Saiful Islam, Association of Bankers, Bangladesh Chairman Selim RF Hossain, and senior officials of the central bank, among others, were present at the event.
Previously, banks cleared the foreign demand drafts (FDDs) issued in foreign currencies under BB’s foreign currency clearing arrangement.
The clearing and settlement process was manual and paper-based. This requires the physical movement of instruments and officials, which leads to higher transaction costs and inconveniences, according to industry insiders.
But now, they said, foreign currency clearing will be easier and more convenient.
Initially, five foreign currencies — US Dollar (USD), Great Britain Pound (GBP), Euro (EUR), Canadian Dollar (CAD) and Japanese Yen (JPY) — will be cleared through the RTGS system.
The clearing and settlement of the Chinese Yuan (CNY) will be incorporated into the RTGS system soon, said senior BB officials.
To facilitate a safe, secure and efficient interbank payment system, BB launched the RTGS system on October 29, 2015, as part of its inclusive digitisation initiative.
BB officials said that Bangladesh’s RTGS system is a standalone one and no other payment platform is connected to it. Banks will have to maintain FC accounts with the central bank to originate and receive the FC transactions in this system.
They added that the system allows only currency-wise transactions and no cross-currency transactions.
Till Saturday, the RTGS system was operating only in local currency inside Bangladesh.
More than 11,235 online branches of 60 scheduled commercial banks and 16 Financial institutions are currently connected to this system.
In July this year, Tk 4,34,694 crore were transacted in 6,23,010 transactions that were carried out through the RTGS system, according to the latest BB data.
