RBI wants banks to adopt uniform account numbers

Consider this: RBI uses 16 digit account numbers, while the core banking system at the State Bank of India follows a 17-digit code. Some new generation private sector banks have 13 and 15 digit account numbers.

Banks are following more than one accounting systems depending on whether a branch is under automated ledger posting machines, total branch automation system, or core banking solution.

Having a uniform account number policy across the banks will facilitate STP under RTGS.

Continuous-time settlement systems are referred to as real time gross settlement (RTGS) system.

The system allows settlement of transactions instantaneously, that is, on a gross basis, completely obviating the need for any clearing arrangement for individual transactions.

RBI will provide the intra-day liquidity (IDL) to RTGS participants. This will eliminate the liquidity risk but the credit risk is transferred from the participants to the central bank.

STP of customer transactions allows banks, on receipt of the credit advice, to directly credit the customer’s account without any manual intervention.

This would facilitate introduction of T+1 settlement in the stock exchanges. Under RTGS, the receiving bank is under obligation to credit the beneficiary customer’s account within two hours of receiving the credit notification at its payment systems gateway.

It may be recalled that RTGS went live on March 26. Initially, it was open to the settlement of inter-bank transactions. From April 29, RTGS has also been opened for the settlement of customer transactions.