NBFIs to come under RTGS from 1 June

Financial institutions have been included in the Bangladesh Real Time Gross Settlement (BD-RTGS) system to expedite the fund settlement process.

The central bank has directed all scheduled banks and financial institutions to take necessary steps to start transactions in the RTGS system from 1 June, according to a circular issued by the Bangladesh Bank on Tuesday.

Initially the financial institutions can make institutional transactions through the RTGS system but they will not be able to do any transaction with the customers, the circular said.

At present, scheduled banks and financial institutions conduct all activities related to interbank money market dealing through EDSMoney, a web-based electronic dealing platform for interbank money market.

Banks have already been using the RTGS facility for fund settlement but financial institutions were not included till now.

RTGS is an electronic settlement system where transfer of funds takes place from one account of a bank to that of another bank on a real-time and on gross basis.

Real-time refers to transactions that do not need any waiting period. Transactions are settled as soon as they are executed.

The minimum limit of a transaction is Tk1,00,000, but there is no limit in case of government payment.

Currently, the RTGS system is operating only in local currency inside the country. Domestic foreign currency transactions are expected to be launched soon.