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)