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ICS History
HISTORY
Since November 2000, the Banking and Payments Authority of Kosovo (BPK) commenced to draw the plan on Inter bank Payment System establishment. This effort has been sustained by technical assistance provided from that time and by IMF (through professional payment consultants). Their recommendations served as the current work procedures. After the establishment of Inter bank Payments Advisor Committee (IPAC) with participation of all commercial banks it was continued with the materialization of rules and procedures, standards and all other operational policies. Inter Bank Payment System has passed through three main development phases.
I. First Phase
Inter bank Clearing System (ICS), officially started its operation on May 7, 2001. This period has been defined with the manual way of payment orders exchange at the BPK, whereas it makes the settlements on NET basis (the difference between debit and credit) at the end of the day for all payment transactions It was a simple clearing and settlement system and has exchange (clearing) of payment orders in paper and settle at the end of day. It was the way of crediting the receiving bank account and debiting ordering bank account. In the beginning, due to the small payment number, registrations in account were done on individual bases. It was an agreement reached between ICS (BPK) and participant banks that entered in this agreement. Except daily operative used principally to exchange the payment order the other characteristic regarding this phase was the activity of the Inter bank payments advisory committee (known as “IPAC”). This Committee that still runs, has initially been composed of representative banks that were ICS members (Pro Credit-ex MEB, BRK and BPB) that was subsequently joined in June of the same year by the Economic Bank (BE) and at the end of 2001 year and ABK, BKP and KSB.
The Inter Bank Clearing System manager has managed the committee work. This committee has especially been established for the development of rules, procedures and standards - to make arrangements on procedures, operational policies and other important details for the efficient clearing system work, being continually engaged in the important development processes in all further phases.
This was the phase where the first step was undertaken towards Electronic Inter Bank Clearing System (EICS) what means data electronic exchange through diskettes or file transfers (that commenced at the end of 2001 up to April 2002).
II. Second Phase
During this period (November, 2001-April, 2002) the process of registration on settlement and clearing accounts began on net basis, difference between debits and credit amounts. Those dates (from payment orders) are received through dissects in standard format set by ICS at the BPK). This phase is designated to avoid the no efficient writings on the letter, conform international standards of inter bank transactions. In this way a strong base for transition to the final phase of ICS was settled. Even in this phase, the Payment Advisory Committee has developed a densely activity, aiming not only the bank encouragement for automation of payment processes, but also the closer presentations and all other issues of this nature that do help and rise this process. This was a strong base, which proceeded to the other development and modernization phase of the INTERBANK PAYMENT SYSTEM and the transition on the so-called Electronic Inter bank Clearing System.
III. Third Phase
Since the preparation for the implementation of the third phase (January/March, 2002) the transition to the EICS, was finished on time; in order that the successful implementation of this development phase to be realized as per the predictable plan of BPK through the professional and advisory recommendation of IMF technical assistance (Mr. Len Fernelius, IMF advisor for payment system, during the period of 2000/2002) and at the same time and technical support of the KPMG –USAID (providing of software and hardware) and also through their special advisor nominated at that time at BPK. Initially the data transmission in relation: Bank1-ICS (BPK) Bank 2 and vice versa, technically was realized through the telephone lines (modem). The entire on- goings were successfully realized and in accordance to the preliminary agreement with the banks. In the beginning of April 2002, there was a full transition to the Inter bank Electronic Clearing System. The accomplishment of work in accordance to the procedures (Providing of software and software) was trusted to the local company ”PRONET” for IT and advises through KPMG/USAID, which company finished all the work as per the procedures, successfully and on time.
During this time also it was realized the transition to the System of the Standard Numbers of the Kosovo Banking Accounts, in accordance to the XIX BPK regulation on the system standard number accounts). Principally this regulation was done in accordance to the international standard structure of the account numbers, as per the IBAN, module 97 10, but without the local code. Such structure was applied at the same time for all the local banks system successfully through the Inter bank Clearing System. All this was made possible under the management and the activities of IPAC and in accordance to the IMF recommendations. The reform of the inter bank payment system development of the new system of payments was done quietly, noiselessly and with the agreement between the parties included in the process it means with the participation of the seven licensed banks from BPK, as legal participants in the system (PCB, BRK, BPB, BE, RBKO, BKP and KSB).
Official acknowledgement of BPK as the owner of the Inter bank Electronic Clearing System (program given by USAID), officially by the chief of the American Office in Prishtina and by the USAID Director, was made on 7th of September 2004 in an official ceremony at BPK.
Another achievement in this development road that it’s worth mentioning is the expansion of the module of massive payments (as a new mass module in ICS) with the new type of payments and Kos – Giro as a new instrument of bill payments, which is well known as “KOS-Giro’ (giro module in EICS- dedicated to the payments for the utility services) implemented from December 2004.
The one system (ICS) for the inter bank payments was developed safely and with the mutual discretion! Whereas we are at the phase of doing much more developed system, aiming the general automation not only the processing in clearing but the final regularities of all settlement accounts, which means settlements on net basis as per the clearing cycles and the priority individual payments for gross settlement in real time. All this to be achieved through RTGS (real time gross settlement) or the similar systems!
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