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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.