Financial Daily from THE HINDU group of publications
Thursday, Apr 08, 2004
Financial Daily from THE HINDU group of publications Thursday, Apr 08, 2004 |
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Money & Banking
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Information Technology `RTGS will boost fee-based income portfolio of banks' Vinson Kurian
Thiruvananthapuram , April 7 REAL Time Gross Settlement (RTGS), the online fund transfer system, may limit bankers' access to float funds but they could hope to make good by levying charges on a range of services delivered under the new dispensation. According to Mr S.C. Gupta, Chairman and Managing Director, Indian Overseas Bank (IOB), introduction of RTGS will thus help consolidate the fee-based income portfolio of banks, too. He told Business Line that overall, RTGS would mean banking industry standing to lose in that the float funds would become difficult to access. "But that is beside the point. For, with the system becoming efficient, transaction costs will come down. Banks can always find other ways for recouping the loss. I expect that RTGS should be operational in two months' time". IOB has readied itself to embrace the technology. The required software is in place. The new system will help reduce transaction costs, and banks will become competitive. The IOB network is among the 3,000-odd bank branches across 275 cities/towns in the country ready to go live on the online fund transfer system. In order to be RTGS-enabled, a bank branch needs to be fully computerised and networked. One will have to go to an RTGS-enabled bank branch where one maintains an account, and give an online instruction for funds to be credited to the beneficiary's account maintained in a branch, which too must be RTGS-enabled.
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