New central bank system causes delays

KIGALI - While the Central Bank is confident that the newly implemented Rwanda Integrated Payments Processing Systems (RIPPS) will enable faster inter-bank transactions, some bank customers have complained of delays. Launched this year, RIPPS seeks to reduce cash based transactions and facilitate banks’ interconnectivity to promote efficiency in payments as well as boost liquidity levels in the banking system. However, some bank clients have complained about finding their accounts empty despite receiving notifications that they had been credited, while bank’s say that the system is inefficient. “When I went to the bank, they told me and several of my colleagues to be patient as BNR was still upgrading its payment system. It has taken close to two weeks now and there is still no money in our accounts, yet usually, it would take only three days,” a trader told the New Times on condition of anonymity. A bank manager in one of the branches of Bank of Kigali said that the ineffectiveness of the central bank’s new system has forced bankers to resort to the previous system, which is manual. “Some clients have not been paid for two months; we are forced to use the old system in order to pay our clients on time, he said, preferring not to be named because he is not authorized to speak on behalf of the bank. However, John Bosco Sebabi, the central bank’s Director of Payment System Department explained that other than individual transactions which are moving on smoothly, the only huddle faced by RIPPS was “multiple credits” whereby, payments are made from one account to many accounts in different banks. “The transaction appears as one payment order, but underneath there are multiple payments. It meant that BNR had to sort them out and create many individual payment orders,” Sebabi explained. He added that: “On Wednesday (last week), BNR met with ministry of finance and other stakeholders from government institutions to solve the issue. In a few days, multiple salaries will be paid with no difficulty.” The central bank implemented the system with the hope that it could act as a springboard to slashing currency in circulation to the level of 5 percent, by changing from cash-based to cashless payments. “This cannot be done unless you have modern instruments which ensure that money remains in the banking sector, while people still access goods and services through debiting and crediting between the banks,” Sebabi added. Ends

National

New central bank system causes delays