BI pursues electronic clearing, joint ATMs

BI pursues electronic clearing, joint ATMs

JAKARTA (JP): Bank Indonesia, the central bank, will introduce
an electronic clearing system later this year and a single joint
Automated Teller Machine (ATM) system next year to improve
payment system efficiency.

Central bank sources said yesterday the electronic clearing
system would, during the first stage, cover only 40 commercial
banks in Jakarta where clearing volume and value had risen
drastically in recent years.

"For the other banks, we will include them gradually into our
electronic clearing system in accordance with their readiness to
participate in the new system," one source said.

Clearing members for the Jakarta clearing system have
increased 9.3 percent a year over the last three years to 780
bank branches and 1070 sub-branches.

The amount of funds cleared daily by the central bank in
Jakarta has increased from Rp 4.5 trillion in 1991 to more than
Rp 25 trillion (US$10.3 billion) with 300,000 clearing items
including bankers' acceptances, promissory notes and other short-
dated commercial papers.

There are more than 100 cities and towns using their own
interbank clearing systems, of which 43 are organized by Bank
Indonesia and its branches and the rest by central bank-appointed
branches of state banks.

All interbank clearing is still done manually and there is no
single system which can electronically connect local clearing
centers with the central bank's clearing system in Jakarta.

For large cities like Jakarta, such a clearing system causes
inefficiencies in the payment system because it depends on
traffic and other factors.

Electronic links

The central bank, in cooperation with PT Lintas Artha, is
building electronic connections with participating Jakarta
branches and sub-branches Jakarta.

Under the new electronic clearing system, participating banks
have to encode all information in their clearing documents and
send it electronically to the clearing organizer, the central
bank.

Based on the electronic data, the central bank's central
computer will calculate and settle the clearings, all of which
participating banks can access in real time.

This way participating banks will get warning of their
clearing positions and can provide longer window time for their
clients.

But participating banks still must submit the hard copy of the
clearing items later in the day as evidence.

"We will have to demand physical documents from participating
banks because our existing regulations require us to do so.
Later, when it is legally possible, participating banks will not
have to submit hard copy," the source said.

The organizer will then calculate the value of clearing based
on the submitted physical clearing items and match the results
with the electronic data calculation.

The central bank will use image technology to speed up the
process of reading, encoding, sorting physical clearing items
into the computer system and calculating clearing value.

Any adjustment for differences in the two calculations will be
done on the next clearing day.

Joint ATM

Another central bank source said the Bank Indonesia would
persuade all banks with ATMs to participate in a central bank-
sponsored single ATM system.

"Therefore, all ATM card holders would be able to use any ATM
in the country, from Sabang in the west to Merauke in the east,
for any transactions offered by the machines," he said.

Indonesia has 15 independent ATM networks and two joint ATM
networks.

The source said all seven state banks and several private
banks had agreed to support a single ATM system.

"But we still have to persuade several large private banks to
participate," he said.

He refused to name these banks. (rid)