US-based eFunds Corporation today has bagged a multi-million dollar subcontract to assist UK-based Logica for implementing the Rs 75-crore real time gross settlement (RTGS) project of the Reserve Bank of India (RBI).
Once implemented, the RTGS will allow banks to make secure inter-bank payments. The new core banking system will also cover all general transactions and central accounting of the RBI, including its general ledger.
Under the agreement between the two companies, eFunds, which is a global provider of electronic payment, risk management and related IT and business process improvement services, will provide technical expertise and functional support to Logica in the implementation of the RTGS project, eFunds said in a statement.
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Logica is a global solutions company providing management and IT consultancy.
eFunds International Pvt Ltd, a wholly-owned subsidiary of the eFunds Corporation, will perform work relating to the porting of Logica's RTGS software onto a mainframe platform. It will help Logica develop a real-time accounting and settlement system for the RBI.
"RTGS will remove the systemic risk as also time lag involved in transacting business with the physical instruments like pay orders. Payments settlement through the RTGS are instantaneous," Sanjay Joglekar, head of Solutions Group (South East Asia), eFunds International Pvt Ltd, said.
The system will also give the central bank a daily picture of the cash reserve ratio as also the statutory liquidity ratio being maintained by commercial banks. It will also prevent banks from breaching their counterparty limits in the call money market and allow for smooth delivery versus payment (DvP) in the government securities market. At present, the RBI gets a clear picture on these ratios only every reporting fortnight, Joglekar added.
As part of the RTGS implementation package, Logica's Quaestor product suite will be supplied to 205 Indian financial institutions to enable their participation in the system.