It is only one year to the end of the national medium term economic strategy otherwise known as the Economic Development and Poverty Reduction Strategy (EDPRS). The medium term interventions on Rwanda’s banking sector is varied, according to various reports.

For instance, banks now boast of assets worth over US$1.34b up from US $1.04b last year, boosted by new policy measures such as issuance of new banking licenses that brought in specialised services and additional capital in line with a fully liberalised regime.

However, issues such as the need to fast track the adoption of new forms of financial transactions like new payment systems, away from mostly cash based systems, within the banking sector, still appears to be a challenge.

Although banks have accumulated a much stronger asset base and improved profitability that has been able to boost its service levels, gaps still exist in the delivery of a more reliable and efficient payment system.

Moreover payments that delivered such record profits by banks still continue to be cash and paper based even as the central bank started implementing a new payment system early this year.

Known as the Rwanda Integrated Payments Processing System (RIPPS), the new system was meant to enable the economy to shift to more efficient and reliable modes of financial transactions.

RIPPS brought in three new components, including an Automated Clearing House (ACH- a netting system), a Real Time Gross Settlement Transfer System (RTGS) and a Central Securities Depository (CSD).

"This program involves introduction of new payment instruments, mechanisms and improving the legal environment,” central bank Governor, Claver Gatete, says.

RIPPS is  meant to overhaul the way interbank payments are carried out, thereby saving not only money but also to boost the speed of transactions and increase safety.

During its launch central bank said that with RTGS , funds could be transferred from one bank to another in  "real time”, meaning that  payments was not meant to be  subjected to any waiting period and on individual basis.

The system is meant to facilitate the banking sector to reduce reliance on cash, support new and innovative payments instruments and systems such as the use of Automated Teller Machines (ATMs) and mobile money.

Therefore, with the RIPPS, it is expected that the usage of cheques will also be reduced to minimal levels.

However, Business Times has since learnt from that use ATMs that are connected to the national switch, Simtel, which was rebranded to Rswitch, are prone to periodic malfunctions casting a dark cloud as to whether the sector’s commitment to migration to a more efficient means of payment will be met before the end of the EDPRS period.

ATMs users are frustrated by the malfunctioning and unreliability of the service as banks and Simtel continues to engage in the never-ending game of blame shifting.

Besides the limited applications on the ATM cards, bank clients always complain about regular breakdowns.

Some say that they find it difficult to withdraw money from ATMs as the service is either down or sometimes indicate that the transaction was effected yet the client did not receive the cash.

And banks that are connected to the Rswitch network say that the malfunctions within the system need urgent redress.

The Managing Director of BCR, Sanjeev Anand told Business Times, that the national switch platform is experiencing technical difficulties adding that it needs to upgrade its technology, expertise and services in order to meet the growing demand of the banking sector and larger user community. 

"So far, Simtel’s service is not to our expectations. They need an area of improvement because it is an important platform in the economy,” he said

In a minisurvey by Business Times, four banks namely BPR, BCR, Fina bank registered the highest ATM failures while KCB and Bank of Kigali (BK) registered slightly lower complaints.

Reasons attributed to lower malfunctioning cases by KCB and BK is due to the fact that both the banks issue Visa cards options for its clients.KCB for instance uses its regional switch based in Nairobi to service such functions.

Konde Bugingo, Chief Operations Officer BPR says that, "Every bank has a different co-banking system so the national switch has different interface talking differently to each bank.”

Bugingo said that such malfunctioning could be attributed to technical hitches at the national switch, especially at the time the national system goes off.

"When the national switch is restored upon its switching off,  we normally encounter such problems,” he said

Other practising banking experts in Kigali, who spoke to Business Times on condition of anonymity, said that most breakdowns are due to commercial bank’s failures to invest in improving ATM machines to meet the ever increasing demand for such services.

"We accept positive and constructive criticism, what we can say is that with overwhelming demand for such ATMs, this has meant that the system is prone to more breakdowns,” Bugingo said, adding that with 70,000 transactions per month for a bank such as BPR working on the old system, chances of a breakdown are high.

 Some banks are avoiding the national switch after the reported malfunctioning such as periodic technical hitches that made their costumers fail to access the ATMs due to constant breakdowns.

For instance, in order to circumvent the malfunctions at the national switch while keeping its customers happy, BK has promoted the use  of Visa cards, whose current usage stands at  4,000 cards in just two  months of its introduction.

Gilbert Nishimwe, the electronic banking manager at BK explains that the bank minimised its complaints by introducing Visa cards which have their link connected via Mediterranean Smart Cards Company (MSCC) instead of relying on Simtel.

He said "We waited for Simtel to be Visa certified after many complaints from our clients and failed and so we decided to use Visa”. Eco Bank and BK are the only banks currently using Visa cards.

Stella Mukeshimana, an accountant in Kigali, said that she opted for a Visa card after it was difficult for her to withdraw money using the ATM card issued by Simtel.

"We have been experiencing a problem with the normal ATM cards prompting a client like me to seek better options,” she said.

 Gloria Nyambok, Head of Banking at KCB  noted that her bank’s ATM system is connected to  KCB Group switch based in Nairobi, which enables it to function effectively thus avoiding some of the malfunctions currently bedevilling  the national switch.

"Our ATMs are monitored both in Nairobi and here with a group of experts who are hired to do so, so that any problem arising is put right immediately”, she said.

When contacted on phone, the Chief Operations Officer at Simtel Paul S. Omanyi did not wish to respond to questions about his company’s reported complaints by the banks.

"I have other appointments to attend to, if you talked to the banks, it thus means that it is their  issues you must have discussed not ours”, he said.

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