Bangalore: A Rs150 crore technology project by the Reserve Bank of India (RBI) to enable instant transfer of funds among banks is running at a fifth of its capacity.
Banks, largely foreign ones, do around 15,000 transactions a day, well below the one lakh transactions that are possible under the Real Time Gross Settlement (RTGS) system.
The system was launched in March 2004 to enable settlement of funds in less than two hours and help cut transaction costs for banks.
“There is no pressure by consumers on banks to adopt RTGS, largely because they are not aware of the facility. RBI should do something to tell banks or make it mandatory to offer this service to clients,” said Alok Shende, director, ICT Practice of consultancy firm Frost and Sullivan.
While multinational banks have been quick to adopt the RTGS system to settle funds, public sector and Indian private banks have been hesitant to adapt to the new technology-based settlement system, said V. Leeladhar, deputy governor of RBI, at a Canara Bank event here.
He agreed that the under-utilization of RTGS is due to a lack of awareness and called on banks to publicize the fact the system could be offered to customers who have financial instruments of at least Rs1 lakh.
Since the foreign banks using the system started charging a hefty fee of Rs500 per transaction, RBI increased the minimum amount to be transacted under the system to Rs1 lakh.
The system covers 28,000 branches of all banks in 3,200 cities across India and currently handles funds worth Rs1 lakh crore every day. On its website, RBI notes just in the G-10, a group of 10 industrialised countries, the turnover of such systems is more than $5 trillion each day.
While the system is for high-value cheques, the electronic fund transfer network that enables transfer of cheques of value as low as Rs10 is also being under utilized.
“It takes around 10 to 15 days for an outstation cheque to get cleared. Though the EFT is not real-time, the settlement can be done once two hours,” said Leeladhar.
He said the cheque truncation system, which allows banks to scan outstation cheques and send it electronically to the concerned branch for instant clearance, would be launched among six banks in April-end.