A total of 1.7 million transactions, worth Rs 361 million have been processed by the primary payment system used by financial institutions to settle inter-bank and customer related transactions during July 2017 to June 2018.
According to a report issued by the State Bank of Pakistan on Wednesday, these transactions, processed by a system called the Pakistan Real-time Interbank Settlement Mechanism (PRISM), showed a volumetric growth of 54.5% over the year, while the value of these transactions witnessed an increase of 29.2%.
This encouraging trend is a testament to the operational resilience of the country’s core payment systems, and shows that SBP’s awareness initiatives relating to PRISM are working well, says the State Bank of Pakistan in its report.
Of the Rs 361 trillion in transactions, the largest share in value belonged to transactions related to the settlement of government securities, which accounted for 71% of the value of transactions processed through this system.
Interbank Fund Transfers, on the other hand, accounted for about 18% of the transactions, while 3rd Party fund transfer transactions accounted for 7% of the value of transactions, followed by ancillary payments settlement with a share in the value of about 4%.
At present, all commercial banks in Pakistan use PRISM to make large sum payments. As of June 30, 2018, 43 direct participants, including 30 banks, are currently using the system, along with 2 specialized banks, 2 microfinance banks, 8 development finance institutions (DFIs), and the Central Depository Company (CDC).
The importance of this system can not be understated as all Open Market Operations (OMO), Auction, Mop-up, Injection, SBP Reverse Repo Ceiling Facility, etc. are settled through this system, the failure of which could trigger disruptions or transmit shocks within the economy.
Recently, SBP has also encouraged the use of PRISM at the branch level in banks for immediate inter-bank transfer of customers’ funds related to home remittances in order to facilitate the general public for their retail payments.
“In the total volume of PRISM’s transactions, the highest share of 79% pertains to 3rd Party customers’ transfers of which 33.3% pertains to the transactions of home remittances,” the report mentions.
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