Nepal Rastra Bank (NRB) has formally launched real time gross settlement (RTGS) in the country from today.
NRB Governor Chiranjibi Nepal and Lord Mayor of London (UK) Peter Estlin jointly inaugurated the high-value cheque payment system in real-time in Nepal amid a function held today. UK Aid is technically supporting Nepal for the launch and implementation of the RTGS in Nepal.
“The launch of RTGS will not only ensure the clearance and settlement of high-value cheques within a few seconds, but will also curb possible transactions from money launderers and terrorists,” the governor said.
Machhapuchchhre Bank and Nepal Investment Bank have adopted this system
in the banking sector for the first time. However, the central bank has inked agreements with all 28 commercial banks to adopt the RTGS.
Prior to the implementation of this system, banking institutions would take anywhere between a few hours and two days to clear and settle a cheque that is issued by one bank and deposited at another.
As per the central bank, the RTGS has been made voluntary for transactions of above Rs 200,000 while transactions of above Rs two million have to mandatorily be made through the RTGS.
Though the central bank has made RTGS mandatory only for commercial banks in the country at present, it has said that the RTGS will be implemented among development banks and finance companies within the next few months.
Currently, Nepal Clearing House Ltd (NCHL), a public company established jointly by NRB, banks and financial institutions, among others, is handling all works related to clearing and settlement of cheques, using electronic cheque clearing system.