A new payment system, Real-Time Gross Settlement, has been introduced by the Central Bank of Nigeria. This is part of the plan to implement Payment System Vision 2020 strategy.
The news was announced by Mr. Tunde Lemo, CBN Deputy Governor (Operations), who is expected to proceed on retirement on January 11.
Mr. Lemo said that the CBN put live operations to the new system on December 16, 2013. The new RTGS was integrated with Scriptless Security Settlement System (SSSS) and would replace the old payment system that has been in use for seven years.
He explained that the RTGS is an interbank payment infrastructure that would facilitate the real-time settlement of electronic funds transfers on gross and irrevocable basis. The new system was built on SWIFT standards to allow safer, easier and faster interconnectivity with other payment system infrastructure both locally and internationally.
“It serves as the nucleus of the national payment system, as all payments finally settle in central bank money through settlement accounts maintained for designated financial institutions,” Mr. Lemo said.
Speaking about SSSS, he said it would facilitate the electronic management of the entire life cycle of securities transactions. The system would manage the primary and secondary market securities and facilitate efficient open market operations.
“The SSSS, on the other hand, is a new initiative to issue, manage and settle government and other money market securities processed as electronic records in a Central Securities Depository (CSD) system,” Mr. Lemo said.
The integration of RTGS and SSSS is a major strategic move with lots of benefits, such as reduction of settlement and systemic risks in payment system, provision of collateral management platform to mitigate settlement risks.
Mr. Lemo assured the latest improvements would help to achieve PVS 2020 objectives and meet world class standards as indicated in the principles for financial market infrastructure.