Yes,There Was A problem:BoU Governor Confirms Central Bank  Payment System Failure

Yes,There Was A problem:BoU Governor Confirms Central Bank Payment System Failure

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By Andrew Irumba

Kampala: The Governor of Bank of Uganda (BoU) Prof. Emmanuel Tumusiime Mutebile has confirmed the Central Bank suffered a payment system failure early this week.

In a brief statement the Governor said, truly the bank had breakdown of the Real Time Gross Settlement System (RTGS) which prompted them to suspend processing of large sums of money.
“Bank of Uganda (BoU) experienced a temporary malfunction of the Real Time Gross Settlement System (RTGS). It should be noted that this WAS NOT a system crash as has been portrayed in the media,” Mutebile said.

He further added that, “There was a brief disruption in transaction processing in the morning (Wednesday) which was resolved shortly thereafter. The Bank of Uganda payment systems remain stable, fully operational and reliable.”

Time Gross Settlement System (RTGS) is a specialist funds transfer system where the transfer of money or securities takes place from one bank to any other bank on a “real time” and on a “gross” basis.

Sources at BoU and Treasury said, the collapse of the payment system puzzled officials and the governor has tasked the IT team at BoU and the head of security to investigate what happened.

The disruption mainly affected both incoming and outgoing RTGS flows and clearing files.
This, according to a senior manager at BoU and another source at a major financial institution in the country, “is an industry-wide issue and is still persisting and unfortunately, until BoU sorts out the system, payments/receipts cannot be effected.”

The BoU director for communications, Ms Charity Mugumya, on 17 July confirmed the incident explained that the issue has since been resolved.
“It is true that the RTGS had some temporal challenges but they have now been resolved and the system is operating normally,” Ms Mugumya said.

According to authorities at the Uganda Bankers Association (UBA), RTGS are specialist fund transfer systems where transfer of money or securities take place from one bank to another on a “real time” and on “gross” basis.
Settlement in “real time” means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. “Gross settlement” means the transaction is settled on one-to-one basis without bundling or netting with any other transaction. Once processed, payments are final and irrevocable.

RTGS systems are typically used for high-value transactions that require immediate clearing. In some countries the RTGS systems may be the only way to get same day cleared funds and so may be used when payments need to be settled urgently.

The affected payments included government disbursements and inter-bank financial transactions, many requiring clearance through intermediary financial institutions, with ripple effects on pay settlements among countless corporate clients.
The executive director, banks supervision, Dr Tumubweine Twinemanzi, yesterday ruled out any possibility of hacking and described the collapse of the RTGS at BoU as “normal system hiccups”.

“RTGS is a digital system for exchange of payments… when your computer misbehaves, do you immediately assume it has been hacked [into] or you ask when was the anti-virus last updated or Operating System Patching done?” Dr Twinemanzi asked.
Dr Twinemanzi was last evening responding to fears that the system failure could have been a handiwork of a hacker.
Finance minister Matia Kasaija and Secretary to the Treasury said they were not aware of the system failure at BoU and promised to cross-check with the governor.

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