MANAMA, 4 October 2006 — Central Bank of Bahrain (CBB) said yesterday that it was in the process of revamping the national payment system, which is the country’s economic lifeline. CBB said that it would implement the Real Time Gross Settlement (RTGS) system that facilitates large value inter-bank payment and settlement in real-time, online mode, with final and irrevocable intra-day settlement. The RTGS will also take care of retail fund transfers on behalf of banks customers. The CBB also said that it would be 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 center of excellence,” said CBB executive director of banking operations, Abdul Rahman Saif. “Effective payment and settlement systems, which conform to international standards, are essential to the functioning of a modern financial market such as Bahrain’s.” He added that the RTGS and SSS would provide a sound foundation for Bahrain’s national payment system by significantly reducing systemic risks and enhancing financial stability.
All full commercial banks (FCBs), currently involved in domestic interbank fund transfer, will be direct RTGS and SSS participants. Other banks will be able to use RTGS facilities as customers of FCBs.