The Governor of Bank Negara Malaysia, Tan Sri Dato’ Seri Ali Abul Hassan bin Sulaiman, today announced that the central bank will introduce a new payment system called the RENTAS System, which is the acronym for Real Time Electronic Transfer of Funds and Securities, to replace the existing SPEEDS System for interbank payment and scripless securities on Saturday, 24 July, 1999.
The RENTAS System is a real time gross settlement system (RTGS) for the transfer and settlement of high value ringgit denominated interbank funds and scripless securities transactions. RENTAS System will enable payment instructions between the participants of the System to be processed and settled individually and continuously throughout the working day. All settled transactions will be considered as final and irrevocable. Thus, the receiver will be able to use the funds immediately without being exposed to the risk of the funds not being settled. This is in contrast to the existing SPEEDS (Sistem Pemindahan Elektronik Dana dan Sekuriti), which is a deferred net settlement system, where payments are processed throughout the working day, but the actual entries across the books of BNM are only effected at the end of the day.
The RENTAS System will also contribute to the reduction of settlement risk in scripless securities transactions by providing a mechanism for delivery-versus payment (DVP). This mechanism would enable transfer instructions for both scripless securities and funds to be effected on a trade-by-trade basis, with final (unconditional) transfer of the securities from the seller to the buyer (delivery) occurring at the same time as the final transfer of the funds from the buyer to the seller (payment).
The System will utilize the COINS ( Corporate Information Superhighway, which is a nationwide, broadband network which supports multiprotocol and multimedia applications ) provided by Syarikat Telekom Malaysia Berhad as the communication network to link up with the participating financial institutions.
Membership of the System, as in the existing SPEEDS System, will be restricted to financial institutions licensed under the Banking and Financial Institutions Act 1989.
The RENTAS System, being a RTGS System, can substantially reduce or eliminate settlement exposures for the participants of the System. Besides reducing the settlement risk for interbank funds transfers, the RENTAS System can help to reduce the risks in exchange for value settlement systems such as those for securities settlements. The System has the capacity to handle a higher volume of transactions compared to the SPEEDS System and incorporates better security features through the use of smart cards for authentication and transmission. Provision had also been made for international linkages to facilitate real time delivery versus payment and real time payment versus payment (PVP) should this need arise in the future.
With the introduction of the RENTAS System, Malaysia becomes the 29th country in the world and seventh in Asia to introduce a RTGS System for interbank payments and securities transactions.