The Central Bank of Bahrain (CBB), formerly the Bahrain Monetary Agency (BMA), is in the process of revamping the national payment system, the lifeline of the national economy.
The Real Time Gross Settlement (RTGS) is a system, which facilitates large value inter-bank payment and settlement in real-time, online mode, with final and irrevocable intra-day settlement. As a value addition, the RTGS will also take care of retail fund transfers on behalf of banks’ customers.
The CBB is also implementing the Securities Settlement System (SSS), which will facilitate real-time, online settlement of all Government securities transactions, including sale/purchase, auction (issue/settlement) and Repo (repurchase) transactions.
Both systems will be seamlessly integrated and are expected to go live during the first half of 2007.
“The implementation of the RTGS and SSS systems will be a major milestone in Bahrain’s continued advancement as an international financial centre of excellence,” said Dr Abdul Rahman Saif, Executive Director, Banking Operations, at the CBB.
“Effective payment and settlement systems, which conform to international standards, are essential to the functioning of a modern financial market such as Bahrain’s.”
The RTGS and SSS will provide a sound foundation for Bahrain’s national payment system by significantly reducing systemic risks and enhancing financial stability, he said.
All full commercial banks (FCBs), currently involved in domestic inter-bank fund transfer, will be direct RTGS and SSS participants. Other banks will be able to avail of RTGS facilities as customers of FCBs.
To ensure close coordination with the industry, a Technical Committee has been formed, comprising representatives of banks and CBB officials. The committee is headed by Mr. Yousif Al Fadhel, Director, Information Technology, at the CBB.
The CBB has also begun a second phase of educating and training the end-users, the banking and financial industry.
“We have been working closely with FCBs to ensure their infrastructural readiness for participation and are very pleased with the progress made by the banks,” said Dr Saif.
The CBB is committed to playing a leading role in facilitating the continued growth of Bahrain’s financial sector, he said.
“We welcome the support from the industry in implementing such a project of national importance which will help enhance Bahrain’s status as the premier international financial centre in the region,” said Dr Saif.
