The RTGS system was launched in 2001. The system handles real-time gross settlement of transactions in Icelandic krónur. This means that payment instructions in Icelandic krónur are entered simultaneously in the accounts of the payer and recipient, on the one hand, and in the relevant financial institutions’ accounts with the Central Bank of Iceland.
Payment instructions transmitted to the RTGS system fall into four categories:
- All payments in amounts of 10 million krónur or more from a customer’s account with one participant to a customer’s account with another participant. The Central Bank may authorise a lower amount.
- Payments made by one participant, from its own account with the Central Bank, to the account of another participant with the Central Bank, irrespective of the amount involved.
- Entries due to settlement in the Greiðsluveitan netting system, irrespective of the amount involved. Greiðsluveitan is owned by the Central Bank.
- Entries due to settlement in the Icelandic Securities Depository securities settlement system, irrespective of the amount involved.
The RTGS system plays a key role in the Icelandic financial system. Among the transactions settled in the RTGS system are those between the Central Bank and deposit-taking institutions, including those undertaken in connection with monetary policy conduct. Also settled in the RTGS system are transactions in the interbank markets for krónur and for foreign currency. In addition, it handles the settlement of two other important settlement systems – the Icelandic Securities Depository securities settlement system and the Greiðsluveitan retail netting system. Financial institutions must be RTGS system participants in order to operate in the Icelandic financial market.
Participation in the RTGS system
Regulatory instruments on payment intermediation and the RTGS system