The Central Bank of Bahrain (CBB) has deployed a new national payment system which enables the instantaneous transfer of funds, speeding up the flow of money in Bahrain's economy and enabling more efficient utilisation of financial resources by businesses and individuals. The Real Time Gross Settlement (RTGS) system, delivered by BCS Information Systems (BCSIS), is an online, real-time and secure system that is now being used by Bahrain's retail banks for electronic payments made on account of their customers or on their own account.

“The processing and settlement of such transactions takes place in real-time, online mode, with final and irrevocable intra-day settlement,” said Mr Ahmed Buhijji, Director, Banking Services, at the CBB, in a press release issued by the central bank. "This means that anyone, whether an individual, a business organisation or a bank itself, can make electronic payments to whomsoever they like, with the value of such payments received almost instantaneously, as against two to four days previously."

BCSIS is a leading provider of clearing and payment systems with nearly 20 years of industry experience and a strong track record of successful implementations in central banks.

In the CBB implementation, BCSIS’ IS Pay RTGS and IS Pay Securities systems combine to provide an integrated solution to support interbank payments and securities transactions. As the prime contractor, BCSIS was also overall responsible for the full delivery of the project, said Ms Lim Boon Lian, General Manager, Project Delivery Group at BCSIS. It worked with two Middle Eastern partners: International Turnkey Systems (ITS) which provided the hardware, system software, network components and related services; and Allied Engineering Group (AEG), a SWIFT solution partner which provided the SWIFT integration services required for the setup of the RTGS and Securities Settlement System (SSS) which supports the processing and settlement of all conventional and Islamic securities in Bahrain.

Ms Lim: The key was to be able to adapt to the working environment in Bahrain quickly, and to have an incredible and committed team.

SWIFT connectivity ensures secure transmission of transactions between the banks, and with the central bank. Together, the systems enable final and irrevocable settlement in real-time for interbank payments, and also for securities transactions on Delivery-versus-Payment basis. The systems also provide detailed real-time information on transactions made, their status, account balances and securities positions.

CBB adopted a three-phase implementation approach, migrating the banks in Bahrain to the RTGS and SSS system in three batches. The project started in January 2006 and went "live" for a first group of banks in June 2007. The second batch went "live" in July while the final and third batch of banks went "live" in August 2007.

The CBB project is BCSIS’ first in the Middle East. The CBB came to know of BCSIS and its RTGS and SSS systems when one of their directors attended the Sibos conference in Singapore in 2003. BCSIS was subsequently invited by their Governor of CBB to submit a proposal for the implementation of an RTGS and SSS system in Bahrain.

According to Ms Lim, “One of the key challenges in the project was the need to co-ordinate and work with several parties, for example, CBB, BCSIS’ partners, the telecommunication service provider and the banks, in order to implement the system. The project was also very challenging in that it involved having to implement, install and test not only one but two major application systems - the RTGS and the SSS - within 18 months. The key was to be able to adapt to the working environment in Bahrain quickly, and to have an incredible and committed team.”