Draft:Real-Time Electronic Transfer of Funds and Securities
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Comment: This article states opinions as fact. For example, "Notable enhancements featured bolstering resiliency". According to whom? Ca talk to me! 12:18, 12 December 2023 (UTC)
- Comment: Wikipedia articles require reliable independent secondary sources with in depth coverage of the subjects.If decent sources are added to the article, feel free to ping my talk page once you've resubmitted the article for review. Stuartyeates (talk) 17:50, 5 December 2023 (UTC)
Overview[edit]
The Real-Time Electronic Transfer of Funds and Securities (RENTAS) system provides real-time gross settlement of interbank fund transfers and supports securities settlement among financial institutions in Malaysia. Established in 1999 by Bank Negara Malaysia (BNM), the country's central bank, RENTAS enables ringgit payments finalization between participating commercial banks on a real-time basis rather than relying on deferred net settlement.[1][2]
History[edit]
RENTAS was introduced to upgrade interbank transfer infrastructure in Malaysia by facilitating irrevocable same-day conclusion of funds movement between banks, aimed at reducing risks associated with net settlement arrangements that delay finality.[1] Over the subsequent years, RENTAS underwent multiple upgrade iterations that expanded specific capabilities around throughput capacity, business continuity protections, and adopting current industry messaging standards:[2][3]
2001 - System reliability enhancements[edit]
- Improved redundancy, power systems stability
2003 - Liquidity optimization features added[edit]
- Gridlock resolution mechanism implemented
2005 - Payments prioritization introduced[edit]
- Hierarchical queuing model based on payment criticality
2008 - Increased processing capacity[edit]
- Upgraded infrastructure to handle over 10,000 transactions daily
2011 - Disaster recovery capabilities bolstered[edit]
- Added secondary disaster recovery site
2014 - Next generation RENTAS launched[edit]
- Built on more modern, robust technology architecture
- Doubled capacity to over 20,000 transactions daily
- Improved resiliency to 99.99% availability
2016 - Securities settlement incorporated[edit]
- Depository Trust and Clearing Corporation (DTCC) links added
2019 - Blockchain integrations piloted[edit]
- Partnership with IBM for proof-of-concept development
2022 - ISO 20022 adoption[edit]
- Integrated centralized message translator to streamline the migration from ISO 15022 to ISO 20022 standard
Functionality[edit]
As a real-time gross settlement (RTGS) mechanism, RENTAS provides immediate final settlement of individual interbank transfer instructions.[4] Costs per transaction exceed those of conventional deferred system models given its real-time capacities. While RENTAS rules do not impose an upper limit on transfer values between member banks, a RM10,000 threshold applies for non-member payment originations, excluding government and central bank transactions.[1]
Specific transactions supported include:[1]
- Interbank fund transfers
- Cash withdrawals from Bank Negara reserves
- Adjustments to central bank capital requirements
- Money market settlements
- Ringgit payments associated with foreign currency deals
The RENTAS Intraday Liquidity Facility (ILF) provided by Bank Negara Malaysia enables completion of payments by participants facing temporary shortages, according to specified terms and parameters.[4]
Participation[edit]
Participation criteria restricts RENTAS membership to approved financial entities in Malaysia.[1] As of 2019, this encompassed over 100 domestic and foreign commercial banks, Islamic banks, investment banks and other non-bank institutions.[5] Additionally, the Malaysian government utilizes the system for select transactions.
Bank Negara Malaysia (BNM) literature suggests qualification guidelines seek to maintain stability in alignment with central bank objectives around operational risk management. Assessed entities must demonstrate adequate governance controls and processing capabilities.[2]
Participating financial institutions, including all major domestic and foreign banks operating in Malaysia are as follows:
- Affin Bank
- Alliance Bank
- AmBank (M) Berhad
- Bangkok Bank Berhad
- Bank Islam Malaysia Berhad
- Bank Kerjasama Rakyat Malaysia Berhad
- Bank Muamalat Malaysia Berhad
- Bank Negara Malaysia
- Bank of America Malaysia Berhad
- Bank of China (Malaysia) Berhad
- Bank Pertanian Malaysia Berhad
- BNP Paribas Malaysia Berhad
- Citibank Berhad
- CIMB Bank Berhad
- Credit Suisse (Malaysia) Trust Services Berhad
- Deutsche Bank (Malaysia) Berhad
- Hong Leong Bank Berhad
- HSBC Bank Malaysia Berhad
- Industrial & Commercial Bank of China (Malaysia) Berhad
- J.P. Morgan Chase Bank Berhad
- Malayan Banking Berhad
- MBSB Bank Berhad
- Mega Bank Berhad
- Nordea Bank AB (Publ) Singapore Branch
- OCBC Bank (Malaysia) Berhad
- Public Bank Berhad
- RHB Bank Berhad
- Small Medium Enterprise Development Bank Malaysia Berhad
- Standard Chartered Bank Malaysia Berhad
- Sumitomo Mitsui Banking Corporation Malaysia Berhad
- The Bank of Nova Scotia Berhad
- The Bank of Tokyo-Mitsubishi UFJ, Ltd. Labuan Branch
- The Royal Bank of Scotland Berhad
- United Overseas Bank (Malaysia) Bhd
- J. Safra Sarasin (Malaysia) Berhad
- Bank Islam Brunei Darussalam
- HSBC Amanah Malaysia Berhad
In 2019, over 5.1 million transactions were processed and settled which amounted to RM56.8 trillion.[4]
Governance[edit]
BNM as the RENTAS oversight authority establishes legal agreements, operating protocols and settlement rules for participants to follow.[6] Regulations cover areas such as liquidity management, payment finality, contingency resilience plans and default mechanisms. BNM qualification criteria emphasizes firms demonstrate strong risk management practices and transaction volume capacities.[7]
References[edit]
- ^ a b c d e zianit (2014-08-16). "Interbank RENTAS Money Transfer in Malaysia". Bank & Money Transfer. Retrieved 2023-12-08.
- ^ a b c "Operational Procedures for Malaysian Ringgit (MYR) Settlement in The Real Time Electronic Transfer of Funds and Securities System (RENTAS)" (PDF). www.bnm.gov.my. Retrieved 2023-12-08.
- ^ "Detailed Assessment of Observance of the CPSS-IOSCO Principles for Financial Market Infrastructures" (PDF). Financial Sector Assessment Program: Malaysia. 2013-02-01 – via International Monetary Fund, Monetary And Capital Markets Department.
- ^ a b c Aman, Azanis Shahila (2020-04-03). "Payment and settlement systems remain stable without major disruptions | New Straits Times". NST Online. Retrieved 2023-12-08.
- ^ "Bank Negara Malaysia revises Policy Document on Securities Borrowing and Lending of RENTAS Securities". Skrine. 2022-12-27. Retrieved 2023-12-08.
- ^ "Participation Rules For Payments And Securities Services" (PDF). www.bnm.gov.my. Retrieved 2023-12-08.
- ^ Basir, Amir Akmar (2009-09-01). "Payment Systems in Malaysia: Recent Developments and Issues" (PDF). ADBI Working Paper Series (151) – via Asian Development Bank Institute.