New ISO 20022 Compliant RTGS and WMA

Dear Friends, Here are Some important topics that may be asked in IBPS PO-III Interview : New RTGS 20022 compliant System and Ways and Mean Advances (WMA). Read Below in Details :

New ISO 20022 compliant RTGS System :

Dr. Raghuram Rajan, Governor, Reserve Bank of India launched the new Real Time Gross Settlement (RTGS) system of the Reserve Bank of India on 19th October 2013.

"With its advanced liquidity and queue management features, the new RTGS system is expected to significantly improve the efficiency of financial markets,” Mr. Rajan said while inaugurating the ISO 20022-compliant system.

The Real Time Gross Settlement (RTGS) system is a large-value funds transfer system which banks use to settle interbank transfers for their own account as well as for their customers.

It was first implemented in India in March 2004 as a major technology based electronic funds transfer system across the country. The system facilitates customer, inter-bank payment on a ‘real’ time and on gross basis.

The new ISO 20022 compliant RTGS system provides three access options to participants – thick-client, Web-API (through INFINET or any other approved network) and Payment Originator module. The participants can decide the mode of participation in the system based on the volume of transactions and the cost of setting up the infrastructure.

 With implementation of the new RTGS system, the existing RTGS system will cease to be operational. Further, the “RTGS System Regulations 2013” would replace the RTGS (Membership) Business Operating Guidelines, 2004 and RTGS (Membership) Regulations, 2004.

Ways and Mean Advances (WMA):

Ways and means advances are the temporary advances provided by RBI to States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments.

RBI makes WMA to State Governments for a period of three months.

Two Types of WMA : Normal WMA and Special WMA

Normal WMA are clean advances while Special WMA are secured advances provided against the pledge of Government of India dated securities. The operative limit for special WMA for a State is subject to its holdings of Central Government dated securities upto a maximum of limit sanctioned.

The interest rate charged on WMA and overdrafts at present are the Bank Rate (9 per cent) and the Bank Rate plus two percentage points (11 per cent), respectively.