The Reserve Bank of Australia (RBA) is Australia’s central bank. It conducts monetary policy, works to maintain a strong financial system and issues the nation’s currency. The role and functions of the Reserve Bank are underpinned by various pieces of legislation. The Bank is a statutory authority, established by an Act of Parliament, the Reserve Bank Act 1959, which gives it specific powers and obligations.
Exchange Settlement Accounts (ESA) are the accounts held with the Reserve Bank of Australia by banks and other institution approved by the RBA for the settlement of payment obligation to each other. All banks and ADIs with aggregate real-time gross settlement (RTGS) transaction that constitute 0.25% or more of the total value of RTGS transaction are required to settle it High Value transaction in real time across its own ESA . Banks must have sufficient funds in their ESAs to ensure that their own payments and those of their customers are able to proceed throughout the day.
The Reserve Bank Information and Transfer System (RITS) is Australia's high-value payments system, which is used by banks and other approved institutions to settle their payment obligations on a real-time gross settlement (RTGS) basis. Final and irrevocable settlement is achieved by the simultaneous crediting and debiting of Exchange Settlement Accounts (ESAs) held at the Reserve Bank of Australia. Payments are entered into RITS directly, or delivered via the external feeder systems, SWIFT and Austraclear .
RITS facilitates liquidity management for banks by enabling them to exercise control over the settlement of payments. Banks may control the priority for settlement given to payments and manage access to liquidity by setting a sub-limit on their ESAs to quarantine funds for priority payments. Payments may be managed via RITS or via the RITS Automated Information Facility (AIF), which automates credit and liquidity messaging instructions between RITS and banks' internal payments systems via the SWIFT network.
The Austraclear System is an electronic depository and settlement system for Commonwealth Government Securities, semi-government and private-sector debt securities. After the Austraclear System has matched a transaction (and securities are available if the transaction involves securities), an interbank settlement request is sent to RITS for settlement testing. Once the payment is settled across ESAs, RITS notifies the Austraclear System, which then settles the transaction in that system. The Austraclear System is operated by Austraclear Limited, a wholly owned subsidiary of ASX Limited. The Austraclear System has over 500 financial market participants as members.
Australian Payment Clearing Association manages the SWIFT PDS, which is a closed user group (High Value Clearing System) of banks exchanging payments via RITS using the SWIFT FIN Copy service. In value terms, SWIFT payments are predominantly related to the Australian dollar leg of foreign exchange settlements and for interbank customer payments.
Effective from 2nd September 2013 China construction Bank Corporation Sydney Branch (CCBSB) has become active member to use Exchange Settlement Account & High Value Clearing System. CCBSB has positioned itself to provide more effective and efficient way of providing Australian Dollar clearing service to its customer and CCB Group. The Next Generation Multicurrency Payment Processing System (GMPS) & Exchange Settlement Account will help to achieve the real time transfer of funds for our customer. An efficient payment system reduces the cost of exchanging goods and services, and is indispensable to the functioning of the interbank, money, and Capital markets .
