PHOTO
16 July 2016
Muscat - In its efforts to ensure efficient payment and settlement system, the Central Bank of Oman (CBO) is in cross border talks for the implementation of GCC Real Time Gross Settlement (RTGS) system.
"The project has reached the stage of floating the 'Request for Proposals' for identifying the vendor to implement the project", the apex bank revealed in its Sustainability report for 2016. According to the CBO, the RTGS system will enable cross border payment requirements among the GCC countries thereby addressing the concerns of fund transfer through correspondent banking model.
RTGS has already been in place in CBO since September 2005. "The main purpose of this system is to process high value payments in low volume transactions, which increases transparency, efficiency, and safety between interbank transactions in the system", the report said. During 2015 alone, as many as 502,501 transactions went through RTGS, registering a growth of 7.68 per cent compared to 2014 when total transactions stood at 466,655. Similar in terms of value, 2015 witnessed a slight increase of 0.33 per cent as total transactions worth RO 165.41 billion were handled by the system compared to RO 164.86 billion in 2014.
However, there has been a slowdown in the growth of values when compared to the last four years; where the average growth rates stood at 11.40 per cent.
On daily basis, RTGS handled an average of 1,376.72 transactions worth RO 4.53 billion, playing a critical role in overall payment system of Oman. Comparable fingers for 2014 were 1,278 transactions worth RO 4.51 billion.
The Central Bank is also in the process of launching Payment Gateway, a project that facilitates businesses in Oman to offer E-commerce services and facilitate online payments. "The project is currently in the process of installation of the system and commencing of user acceptance testing", the Central Bank said.
According to the report, the National Payment Systems Law (NPSL), which has been drafted to address all the identified gaps in the existing legal environment, has also been finalized and now is in the process of being legalized in coordination with the Ministry of Legal Affairs and is in the final stages of enactment.
Financial Safety Nets such as a deposit insurance scheme performs a valuable function of boosting the confidence of the public in the banking sector by providing comprehensive insurance coverage on specific deposits.
In Oman a system of 'explicit' deposit insurance, namely Bank Deposit Insurance Scheme (BDIS) is in place since 1995. It provides comprehensive insurance coverage on deposits of up to RO 20,000.
BDIS was initially funded by a contribution of RO 5 million by member banks and an equal contribution by CBO. Premiums are collected on an ex-ante basis from member banks at the rate of 0.05 per cent of the total value of deposits at the end of each year and CBO contributes half of the total premiums paid by the member banks each year.
At the end of third quarter of 2015, the funds of BDIS surpassed RO 93 million. "It aims to increase the reserve funds to 5 per cent of the covered deposits, however, at present, the coverage is less than three per cent of the eligible deposits", the bank pointed out. According to the report, the electronic cheque clearing system being upgraded to support the latest version of database embedded with additional features like cheque archiving system for smooth and efficient operations.
Muscat - In its efforts to ensure efficient payment and settlement system, the Central Bank of Oman (CBO) is in cross border talks for the implementation of GCC Real Time Gross Settlement (RTGS) system.
"The project has reached the stage of floating the 'Request for Proposals' for identifying the vendor to implement the project", the apex bank revealed in its Sustainability report for 2016. According to the CBO, the RTGS system will enable cross border payment requirements among the GCC countries thereby addressing the concerns of fund transfer through correspondent banking model.
RTGS has already been in place in CBO since September 2005. "The main purpose of this system is to process high value payments in low volume transactions, which increases transparency, efficiency, and safety between interbank transactions in the system", the report said. During 2015 alone, as many as 502,501 transactions went through RTGS, registering a growth of 7.68 per cent compared to 2014 when total transactions stood at 466,655. Similar in terms of value, 2015 witnessed a slight increase of 0.33 per cent as total transactions worth RO 165.41 billion were handled by the system compared to RO 164.86 billion in 2014.
However, there has been a slowdown in the growth of values when compared to the last four years; where the average growth rates stood at 11.40 per cent.
On daily basis, RTGS handled an average of 1,376.72 transactions worth RO 4.53 billion, playing a critical role in overall payment system of Oman. Comparable fingers for 2014 were 1,278 transactions worth RO 4.51 billion.
The Central Bank is also in the process of launching Payment Gateway, a project that facilitates businesses in Oman to offer E-commerce services and facilitate online payments. "The project is currently in the process of installation of the system and commencing of user acceptance testing", the Central Bank said.
According to the report, the National Payment Systems Law (NPSL), which has been drafted to address all the identified gaps in the existing legal environment, has also been finalized and now is in the process of being legalized in coordination with the Ministry of Legal Affairs and is in the final stages of enactment.
Financial Safety Nets such as a deposit insurance scheme performs a valuable function of boosting the confidence of the public in the banking sector by providing comprehensive insurance coverage on specific deposits.
In Oman a system of 'explicit' deposit insurance, namely Bank Deposit Insurance Scheme (BDIS) is in place since 1995. It provides comprehensive insurance coverage on deposits of up to RO 20,000.
BDIS was initially funded by a contribution of RO 5 million by member banks and an equal contribution by CBO. Premiums are collected on an ex-ante basis from member banks at the rate of 0.05 per cent of the total value of deposits at the end of each year and CBO contributes half of the total premiums paid by the member banks each year.
At the end of third quarter of 2015, the funds of BDIS surpassed RO 93 million. "It aims to increase the reserve funds to 5 per cent of the covered deposits, however, at present, the coverage is less than three per cent of the eligible deposits", the bank pointed out. According to the report, the electronic cheque clearing system being upgraded to support the latest version of database embedded with additional features like cheque archiving system for smooth and efficient operations.
© Oman Daily Observer 2016
