Crashing of servers affects RTGS across banks

Aaron Rodrigues 09 December 2009

RTGS, which was designed to provide real-time settlement of payments, is failing to do so due to crashing and hanging of servers across banks

The growing incidence of real time gross settlement (RTGS) servers hanging or crashing across banks has resulted in a delay in transactions, so much so that lenders have to complete these transactions on the next day.

According to banking sources, RTGS systems have been hanging or crashing frequently, causing a delay for customers as well as bank employees.

“The reasons behind the servers hanging are the lack of connectivity between the Reserve Bank of India (RBI) and other banks, and bad networking between the servers of banks as well as the central bank,” said an official from a State-run bank.

There are also problems related with leased lines, routers and modems while transmitting messages. Since RTGS requires all the concerned parties to work simultaneously, any minute error can cause problems with the systems, the official added.

He further said that the RBI insists that deals are settled on the very same day, but at times these deals are being delayed due to server problems, and there is no assurance over the proper functioning of the system.

According to an official from the RBI, the recent problems with the servers have been happening because the apex bank has installed a new software patch in the RTGS system. However, many bankers said that the problems have been around since the past few months.

RTGS is a centralised payment system set up in 2004 by the RBI where inter-bank payment instructions are processed and settled, continuously throughout the day, as and when the instructions are received and finally accepted by the system. As a funds transfer mechanism, it is probably the fastest possible money transfer system through the banking channel.

The number of bank branches offering the RTGS service has increased from 43,512 to 55,000 during 2008-2009. The daily average volume of transactions is 90,000 for about Rs1,200 billion, of which 82,000 transactions worth Rs980 billion pertained to customer transactions as of end-August 2009.

Comments

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Vedika

2 decades ago

Yet another symptom of the Central bank going ahead o its capabilities. The RTGS has worked beautifully but theRBI has been callous about expanding the abilities of the system. RBI is and should behave like a regulator instead of tryign to run all the banks by itself through its frequent pronouncements. The entire Reserve Bank has become very arrogant since the economic crisis has engulfed the world. People like your magazine have given them accolades for things they didnt do!! Let me state it here that the economic engine of India being so much more dependent on the domestic demand was never going to be a basket case in the recession hit world. The RBI's actions or inactions have been instrumental in holding back the entrepreneurial energies of the country by limiting the ability of small players to get meaningful credit. I think Moneyliife needs to be a lot more critical of the Central Bank than it is. This is no different than the role you profess to play in the stock market/mutual fund industry. Sucheta and Debashis, I urge you to please throw away the glares with which you view the RBI's actions. Only your meaningful analysis and reporting can move the Central Bankers to come out of their Ivory Tower and take meaningful actions which would enable us to plan our finances and investments and not keep paying off the higher and higher property and food prices.

JAGDISH RAYARIKAR

2 decades ago

THIS PROBLEM IS NOT RESOLVED TILL TODAY i.e. 10.12.09. MANY COMPANIES ARE FACING PROBLEM FOR ADDITIONAL COST OF INTEREST COST INCREASED DUE TO RTGS PROBLEM. ALSO ISSUE OF CREDITABLITY OF PAYMENTS RETURNED DUE TO THIS ? THIS IS A VERY VERY SENCETIVE ISSUE.

Vijay Meghani

2 decades ago

I regret to have to state that I believe that RBI's decision to completely discontinue the High Value Clearing facility is a very retrograde step in fact an ill-advised and Giant Step Backward. This is particularly so given the absolutely rudimentary state of the cheque clearance systems in the country together with the ridiculous pace and cost of legal redress that face the world of commerce. RBI's action is a classic case of throwing the "Baby out with the Bathwater". The sooner the RBI reverses this decision keeping in mind the ground realities & again bring in a system of same day clearing of high value cheques the better. I wouls alos urge the Chambers of Commerce to take up this issue strenuously with the RBI.