BI launches new fund transfer operation

BI launches new fund transfer operation

JAKARTA (JP): Bank Indonesia (BI) officially launched on
Friday an electronic clearing and settlement facility in a bid to
speed up interbank transactions.

The central bank's deputy governor, Aulia Pohan, said that
with the BI-Line facility, all transfers of funds between banks
would be performed electronically.

"Fund transfers between banks are conducted through the banks'
personal computer units that are on-line with BI," Aulia said.

Aulia said under the new system, fund transfers between banks
could be done within 15 seconds, as transfer orders and
verification were all operated electronically.

Previously, interbank fund transfers were performed manually
by exchanging transaction documents between the two banks, with
BI acting as an agent in verifying the authenticity of the
papers.

Head of the development of the national payment system
department of the central bank, Mohamad Ishak said banks only
needed to have one personal computer and a dedicated telephone
line.

"The BI-Line system is simple, and practically cost-free to
participating banks, as BI will provide all necessary software
for computers to ready them for the BI-Line," Mohamad said.

He said the BI-Line facility has since March been implemented
by eight local banks, and will be further implemented in another
30 banks by mid-August.

The new electronic transfer service is part of the central
bank's program to boost its clearing and settlement
activities.

The central bank launched last week a new clearing and
settlement operation to speed up fund transfers between customers
of different banks to less than 24 hours, from at least two days
previously.

BI-Line, Mohamad said, was a stepping stone toward the
installment of further improved technology called Real Time Gross
Settlement (RTGS) in September next year.

Mohamad said RTGS was a more integral and secured system
application in payment technology systems. It can handle a
significantly larger volume of simultaneous transactions in less
than a second.

"In the development of the RTGS for BI we have been assisted
by international institutions, including an expert from the
Federal Reserve of the United States, who is sharing experiences
and skills with us."

He said local vendors for the RTGS project included PT Lintas
Artha, PT Mekar Prana Indah and PT Praweda of Soedarpo
Corporation.

"These companies' roles include supplying the necessary
infrastructures, such as dedicated communication lines for the
RTGS project." (udi)