Bank of Uganda (BoU) spent US $33 million on its Real Time Settlement System (RTGS) that had a malfunction on Wednesday, sources say.
In a statement yesterday BoU Governor Emmanuel Tumusiime-Mutebile said the system experienced a temporary malfunction and it did not crash as reported in the sections of the local media.
“It should be noted that this was not a system crash as has been portrayed in the media. There was a brief disruption in transaction processing in the morning which was resolved shortly thereafter,” Tumusiime-Mutebile said.
Stories Continues after ad
He added that the payment systems remain stable, fully operational and reliable.
However, sources say the RTGS is supposed to have two back-up systems in case of a malfunction or crash. Sources say they doubt whether the two systems were installed on computers at the central bank.
The system’s brief breakdown on Wednesday affected government payments and interbank transactions.
RTGS systems are usually operated by a country’s central bank as it is seen as a critical infrastructure for a country’s economy. Economists say that an efficient national payment system reduces the cost of exchanging goods and services, and is indispensable to the functioning of the interbank, money, and capital markets.
A weak payment system may severely drag on the stability and developmental capacity of a national economy; its failures can result in inefficient use of financial resources, inequitable risk-sharing among agents, actual losses for participants, and loss of confidence in the financial system and in the very use of money.
Sources say in the likelihood that occurrence occur, the banks revert back to manual systems where it drags for sometimes for a simple transaction to be carried out and also poses a risk of funds being stolen in the process.