"At present, the corporation provides guarantees on spot transaction in the currency market. Once the Payments and Settlement Act, which has already received the Parliament nod, is notified, we will register CCIL with the Reserve Bank of India as a service provider to offer such products (guarantees for forward transaction)," Chairman R H Patil said addressing seminar on Payments Annual Summit here.
After notification of the Act, which is expected to happen in two months, CCIL would become a central bank-regulated entity. The guarantees for currency forward deals and interest rate derivative will provide assurance that transactions will be honoured, Patil said.
For the interest rate swaps, CCIL is collecting information on the transactions, which are done over the counter. In case the forward contracts (currency) are cancelled, the deal is forclosed and loss is aportioned to the party.
Earlier, on the use of electronic payment channels, RBI Chief General Manager A P Hota said the use Real Time Gross Settlement (RTGS) for large value transaction has seen growth between 2004 and 2008.
Daily about 35,000 transactions for the sum of Rs 3,00,000 crore are done on RTGS. "We are not happy with the present level of activity. It should be more, may be daily turnover could grow to Rs 14,00,000 crore - equal to the size of the economy," Hota said.
Still there is a tendency to do high value paper-based transactions. The paper processing is not efficient and there is a need to increase electronic transaction. The use of demand draft have come down from 8 per cent to 6 per cent in four years, he added.