The banking sector is likely to be equipped with an Automatic Transfer System in the coming months, which is an upgraded version of the real-time gross settlement (RTGS) system.
The new settlement system would fast-track harmonizing and integrating banking services for the benefit of Pakistan’s financial markets and improving cost efficiency. The new system is expected to offer enhanced cyber resilience and optimizes the use of liquidity, as participants are able to steer, manage and monitor liquidity in central bank money across all services in the sector.
With the newest RTGS, harmonization is expected to be achieved through state-of-the-art standards as well as a set of common components that are shared across banking services, bringing further cost savings for banking customers.
Technical changes are expected in the new RTGS this time, which may include improvements and integrations with the nationwide wholesale payment framework, which would also help attract more individuals and retailers toward the tax net.
An RTGS system is defined as a gross settlement system in which both the processing and final settlement of funds transfer instructions can take place continuously (i.e. in real-time). As it is a real-time settlement system, the system affects final settlement continuously rather than periodically at pre-specified times provided that a sending bank has sufficient covering balances or credit.
Launched in 2008, the RTGS in Pakistan is called the Pakistan Real-time Interbank Settlement Mechanism (PRISM) and is the only Large Value Payment System. It is an RTGS that provides a central platform for the settlement of large-value interbank funds transfers, Government Securities, retail clearing, and customer transfers (over a certain minimum amount limit).
An upgraded PRISM will offer more options and better processing capabilities for the local banking industry when implemented.
Source: Pro Pakistani