Real time settlement to impact cash flow: RBI

However, if customers decide to outsource this service to banks, then they may still get this business, he added. Referring to the loss of free float with the customers availing of RTGS, he said individual banks would face this issue but the financial system as a whole would not be disturbed as the money would still remain a part of the same. ‘‘Banks, which have factored in float money while pricing their products, will be hit,’’ he said. Gandhi said banks have been told about this aspect two years ago and asked to review their pricing after this issue into account.

RTGS system, which would help reduce settlement and systematic risks and enables faster, efficient and secured fund transfer, went live two days ago with SBI, HDFC Bank, Saraswat Bank and Standard Chartered Bank. The customer transactions are expected to go online in April 2004.