Kina Automated Transfer System (KATS) Monthly Statistics updates

Monthly Analysis on the Use of Payment Instruments

1. Preface

Safe, stable and efficient payment systems are critical to the effective functioning of the financial system. Payment systems are the means by which funds are transferred, primarily among banks. It is the main channel that financial shocks are transmitted across domestic and international financial systems and markets. Therefore, a robust payment system is the key infrastructure required to maintain and promote financial stability.

The payments system is the collective term for all the individual payment systems in a country and has a strong influence on the velocity of financial flows in the economy, the overall costs and liquidity. It is also a channel for monetary policy transmission. The Bank of Papua New Guinea is committed in ensuring that it is safe and functioning efficiently. The Central Banking Act 2000, states that one of the primary objectives of the Bank is to “promote an efficient national and international payments system”. This is strengthened further by the National Payments System (NPS) Act 2013 which provides the legal foundation to implement new payment types, such as electronic cheque truncation that came into operation in September 2014 and direct credits in 2015.

The Bank of Papua New Guinea introduced the Kina Automated Transfer System (KATS) over the last three years with the objective of fostering an efficient payment system for processing and settling all payments (both small and large value) between all the banks and their customers. This included electronic payments which are safe, efficient, fast and predictable. The operation and usage of KATS are defined in the KATS System Rules. All the banks (including BPNG in its dual role as a bank and as the operator of KATS) agree to abide by the System Rules.

2. Types of Payment Instruments in KATS There are three (3) types of payment instruments currently handled by KATS.

  • Real Time Gross Settlement (RTGS). These are mainly high-value and high-priority interbank or individual payment instructions that must be settled by debiting and crediting the accounts of the banks involved immediately (in real time) and individually (gross) with finality and irrevocability (i.e. they cannot be disputed or reversed). It is a requirement of the KATS System Rules that every RTGS payment in favour of a customer of a bank must be credited to that customer’s account at the receiving bank within no more than two (2) hours of being settled in KATS.

RTGS went live on 14th October 2013.

  • Electronic Cheque Exchange (Cheque Truncation). This is a process whereby cheques are scanned at the bank where they are deposited, and the images of the scanned cheques, together with the accompanying details, are exchanged between the banks electronically, via KATS. Currently, banks have a four days period during which they can dishonor cheques. This period will be progressively reduced over the next one to two years as banks become more comfortable with KATS and the way it operates.

Cheque Truncation went live on 8th September 2014

  • Direct Credits (DC’s). This is the process whereby an individual or company can request their bank to make a payment to the account of another individual or company at any bank. Direct Credits are settled twice daily within KATS. Depending on the time of day when a Direct Credit payment is processed by KATS, the funds are available to the recipient’s account on the same or next day, if all account details are correct.

Direct Credits went live on 9th February 2015

3. Payment Systems Unit

Within BPNG, the Payment Systems Unit (PSU) is the operator of KATS and is responsible for opening and closing the KATS business day, monitoring the banks’ reserve funds, monitoring transactions between banks during the KATS operating hours, funding the Exchange Settlement Account (ESA) requirements and responding to queries from all the commercial banks.

PSU is also responsible for producing payment statistics processed in KATS.

4. Inter-bank Transactions

In PNG, there is one single system which processes interbank transactions which is operated and overseen by the Bank of PNG. It is a so-called hybrid system, which accepts both “low value” (cheques & DC’s) and “high value/priority” (RTGS) payments.

Due to different stages of KATS implementation, PSU began to compile statistics in January 2015.

5. Statistics & Charts Table1: Values & Volumes by Types of Payments 2015

Year Month RTGS Cheques Direct Credits
  Value (K’mio) Volume Value (K’mio) Volume Value (K’mio) Volume

2018

Aug 4,337 8,885 2,005 88,656 2,203 274,459
July 4,258 8,816 2,195 89,809 2,303 255,078
June 4,175 8,252 2,145 85,296 2,089 248,531
May 4,850 8,336 2,274 99,861 2,345 273,198
Apr 2,515 6,917 2,317 89,492 2,005 232,254
Mar 2,815 6,887 2,254 94,912 2,008 254,254
Feb 3,910 6,509 1,943 87,661 1,687 226,755
Jan 4,199 6,946 1,946 84,639 1,818 226,312

2017

Dec

4,107

6,613

2,464

92,776

1,996

225,736

Nov 4,372 6,570 2,262 102,132 1,726 236,768
Oct 4,088 6,950 2,403 102,772 1,664 223,310
Sept 2,358 6,739 2,155 96,018 1,426 217,147
Aug 2,699 7,544 2,572 103,882 1,412 246,448
July 3,029 6,691 2,124 93,125 1,372 232,431
June 2,930 6,658 2,395 104,844 1,431 227,480
May 3,138 7,251 2,754 115,019 1,447 227,029
Apr 4,277 5,866 2,231 95,985 1,245 199,581
Mar 4,363 7,170 2,294 115,135 1,587 234,319
Feb 4,413 5,977 2,400 102,993 1,490 196,767
Jan 3,198 6,038 2,302 98,112 1,674 196,164

2016

Dec

5,384

5,598

2,714

114,020

1,792

220,024

Nov 4,202 6,748 3,025 116,078 1,498 215,319
Oct 5,814 9,787 2,663 113,959 1,613 198,126
Sept 3,786 6,427 2,512 111,390 1,470 213,238
Aug 3,553 6,130 3,093 126,379 1,846 215,320
July 4,511 5,373 3,196 114,286 1,457 194,219
June 3,492 5,474 2,584 114,599 1,491 213,923
May 3,597 5,666 3,091 126,441 1,241 198,691
Apr 5,046 5,049 3,186 122,816 1,050 192,446
Mar 3,777 4,921 2,582 124,151 1,064 209,371
Feb 5,156 4,826 2,228 124,945 1,099 181,921
Jan 2,515 4,405 3,197 114,452 1,234 166,896

2015

Dec

2,856

4,888

4,294

144,881

1,298

212,520

Nov 2,689 5,132 3,804 132,117 1,256 180,651
Oct¹ 2,516 5,464 3,360 139,245 1,170 193,954
Sep 2,528 5,654 3,422 138,140 1,172 197,774
Aug 1,823 5,347 3,443 132,151 1,321 184,620
July 2,389 5,373 4,045 143,557 1,370 209,743
Jun 2,239 4,928 3,471 143,943 1,314 187,267
May 2,177 5,413 3,603 141,999 1,212 183,114
Apr 2,525 5,341 3,555 137,234 1,272 200,646
Mar 2,682 5,603 3,655 152,034 1,185 188,275
Feb 3,201 5,572 3,255 135,688 611 128,183
Jan 3,964 6,290 3,249 126,248

Chart. 1: Values & Volumes by Real Time Gross Settlement (RTGS) Payments
¹The January – September data were from Maybank PNG Ltd. It was purchased by Kina Bank Ltd and the data, commencing from October 2015 were from the Kina Bank Ltd.
Chart. 2: Values & Volumes by Cheque Payments Chart.
3: Values & Volumes by Direct Credit (DC) Payments
4: Trends in RTGS, CHQS & DC Volumes
 
5: Cheques as a Proportion of Interbank Retail Payments
 
Chart 5 shows two trends. It shows that the volume of cheque and the total value of cheques, as a percentage of total retail payments, are both declining. Cheques are being replaced by electronic means of payment, as expected.

Last updated: 04th September 2018 Source: Payment Systems Department, Bank of Papua New Guinea

Kina exchange rate (MIDRATE)

Last Updated:
Released:15/10/2018

USD 0.2980
AUD 0.4191
EUR 0.2579
GBP 0.2270
JPY 33.35
NZD 0.4581
SGD 0.4108

Kina Facility Rate:

    • Oct 2018  6.25%
    • Sept 2018  6.25%
    • Aug 2018  6.25%
    • July 2018  6.25%
    • June 2018  6.25%
    • May 2018  6.25%
    • Apr 2018  6.25%
    • Mar 2018  6.25%
    • Feb 2018  6.25%
    • Jan 2018  6.25%