Bank of Zambia : The Southern Africa Development Community Real Time Gross Settlement (SADC-RTGS) System

THE SOUTHERN AFRICA DEVELOPMENT COMMUNITY REAL TIME

GROSS SETTLEMENT (SADC-RTGS) SYSTEM

1. What is the SADC- RTGS System?
   It is an automated interbank settlement system, which settles payment obligations between participating banks in real-time in all the SADC countries. The system has been in operation in Zambia since September 2014. The system currently settles payments in South African rand (ZAR) only. There are considerations to include additional regional currencies in the system in the near future. The System was developed to facilitate funds transfer for cross-border payments in the SADC region in order to contribute to the promotion of trade and investment. All businesses and individuals can use this system to send and receive payments to and from a trading partner within the SADC region. The transactions are processed in real-time meaning that a counterparty receives the funds faster and without delay.
2. SADC-RTGS'sdesign and implementation is guided by the following principles:
3. • All payments are in real time across the region.
   • Use of existing infrastructure in terms of the SWIFT network
   • Use international standards to ensure interoperability.
   • Invest in straight-through processing.
   • Each country will keep its own currency and financial infrastructure.
   • Cross-bordercheques or drafts phased out.
4. How can a business firm or individual utilize the System?

When you import goods and services within the SADC region, you can remit or pay your counterparty through the system by contacting your commercial bank as listed below. Request your commercial bank for forms that you need to fill in for funds transfer using the SADC-RTGS. This can be done within the bank branch or online as may be required by your commercial bank. The process will require you to provide the detailed information needed for the cross border funds transfers. The transaction will be processed in real- time and on a straight through process allowing businesses and individuals to received funds instantly.

When you export goods and services within the SADC region, you can request your counterparty to pay you through the system. The funds will be received faster as compared to correspondent banking as funds are processed in real time.

To use and pay through the system, a payer from Zambia or any participating countries does not need to have a Rand denominated account. All settlements are done by commercial banks through sourcing the Rand in the South African interbank market.

4. Who are the participating banks in Zambia?

The following are the participating banks in the system;

1. Absa Bank (Z) Limited
2. Banc ABC t/a Atlas Mara
3. Bank of Zambia
4. Cavmont Bank (Z) Limited
5. Ecobank (Z) Limited
6. First National Bank (Z) Limited
7. Stanbic Bank (Z) Limited
8. Standard Chartered Bank (Z) Ltd
9. Zanaco
10. Zambia Industrial Commercial Bank

5. What are the Benefits of the SADC-RTGS system?

For Businesses and Person On the Street	Participant Banks Benefit
∙ Faster payment services across the broader	∙ Processing of real-time, immediate, final and
	SADC region	irrevocable transactions
∙	Easier to transact across borders as the	∙ Reduced costs because of harmonised
	system is available in all the member	processes and international standards
	countries.	∙ Real-time notifications in the case of errors
∙ The displacement of cash and the	or when an account is not funded
	requirement for cash exchange	∙ Access to the SADC-RTGS web's running
∙ Improved safety and security	dashboard (position monitor) which shows
∙	Enhanced pricing transparency	running balances in participants' accounts in
∙	Uniform ways of making payments and	real time.
	payment instruments
∙ The ability to compare services, which leads
	to the use of efficient and cost-effective
	solutions
∙ Save transaction costs. One way conversion
	from Kwacha to Rand or vice versa as
	opposed to three way conversion from
	kwacha to Dollar to Rand

For Businesses and Person On the Street	Participant Banks Benefit

• No need to source US Dollars to settle the transaction

THE BANK OF ZAMBIA WISHES TO ENCOURAGE BUSINESSES AND INDIVIDUALS TRADING IN THE SADC REGION (ESPECIALLY SOUTH AFRICA) TO TRANSACT IN RAND THROUGH THE SADC RTGS SYSTEM IN ORDER TO SAVE CURRENCY CONVERSION COSTS AND ALSO FASTER SETTLEMENT OF TRANSACTIONS.

Issued by:

Bank of Zambia

P.O. Box 30080

LUSAKA