Bank South Pacific

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The aim of this project is to suggest and document how Treasury Department of Bank South Pacific (BSP) Colonial can enhance communication and collaboration with its major stakeholders by adopting the modern applications of digital economy.


The following lists the objectives of this project, which if all accomplished, will be able to meet the aim of the project.

  • An understanding of the business environment within which the Treasury Department of Bank South Pacific (BSP) Colonial operate;
  • A critical evaluation of the current methods of facilitating communication and collaboration with stakeholders;
  • An understanding of the current resources available to enhance communication and collaboration as part of a digital economy;
  • A solution to enhance communication and collaboration; and
  • A post-hoc evaluation of the suggested solution.

Information System

What is Information System

Information system is the process whereby data is retrieved from an external source, gets into the system and processed and gives out information to the stakeholders of an organization, which is useful for decision making (Graduate Schools Home, 2010)[1].

Components of IS

There are 5 components of an information system (IT Lecture Notes, 2006)[3]:

  1. People
  2. People who are involved in the information system, any part, whether they are involved in getting the data from external source, processing department, or giving out information to all relevant stakeholders. Such roles of people may involve data entry operator, programmer or manager.

  3. Software
  4. The software that an organization uses to allow for collaboration and communication and aid to transfer data to the processing department and from this department to the stakeholders in the form of processed data, i.e., information.

    For example, in the case of a banking industry, the transfer of large sum of money from one bank to another is done using Real-Time Gross Settlement (RTGS) software via electronically, without any physical means (Investopedia, 2010)[4].

  5. Hardware
  6. The computer hardware such as computer monitor, keyboard, mouse, network cables and the like that assist in data communication and thus allow room for collaboration and communication.

  7. Procedures
  8. Procedures are manuals that guides, explains or helps people how to perform certain functions such as how to process data.

  9. Data
  10. This is data retrieved from external source that is yet to be processed and making it
    into useful information that can be used to help make decision.

Bank of South Pacific (BSP) Colonial

The main role of BSP Colonial is to enable businesses or individuals who need money to meet and do business with people who have money.

It operates in four business streams, and to broadly classify it, these are:

  • Banking
  • Life Insurance
  • Health Insurance
  • Investments

International & Treasury Department

International & Treasury Department's function is to facilitate international transfers and local transfers. Foreign currency notes, traveler's cheques, etc. We will be focusing on Money Market area involving payments for settlement using Fiji's latest technology that was introduced and went live on 24th October 2008, called FIJICLEAR.

Financial Intermediation

The payment system plays a critical role in a country's economic development because the payment system is the backbone which performs monetary and financial system. It is through the payments system that money goes around and allows money to be transferred between savers and lenders, buyers and sellers or from one point to another. By reforming and developing the payments system, it is possible to reduce the overall transaction costs and improve the efficiency of financial transactions in an economy. Efficiency such as convenience and security has favourable flow - on effects to the whole economy.

The central bank inevitably plays a key role in this payment process. This stems from their primary functions of providing liquidity to commercial banks and clearing payments between banks. This clearing service in Fiji has evolved over the years. Before the system was introduced, the clearing was done in central bank (known as RBF Clearing) where all commercial banks would come in once a day to clear their payments under their supervision. Then commercial banks themselves took over the entire process with approved rules and guidelines. Therefore, the banks have shifted their focus on Real Time Payment System using a system known as RTGS (Real Time Gross Settlement).

The complexities in the financial intermediation are increasing with the development of modern products to better suit the evolving demands of customers. Inevitably, it is the central bank that takes a lead role in the modernization of the payments system because of its importance to the economy and the entire financial system. At the same time, such a system facilitates our work as custodian of financial stability.

Payment mode is wide ranging. Cash is the common mode of payment. However, the inconvenience of carrying cash and increasing security threats has encouraged the move towards other payment media. But paper based instruments like cheques and drafts are not so convenient. In modern times, cards and electronic payments are regarded as the most convenient and safer instruments, although they too are subject to certain risks.

The manual payment system that Colonial and Reserve Bank used did work adequately, but it also had some shortcomings. The major one was that it takes time for clearance. All clearing was done at 3pm on Mondays to Thursdays and 3.30pm on Fridays. Thus customers had to wait till 3.45pm to access their money in the bank after clearance from Reserve Bank of Fiji. The cost of paper based instruments like cheques is relatively high in Fiji adding to the cost of doing business. Some times signatories are not available hence delay in payments.

Overview of FIJICLEAR

FIJICLEAR is the name of Fiji's Real Time Gross Settlement System (RTGS) which allows payments to be made electronically to/from within the country from one commercial bank to another. Transfers are denominated in Local Currency only (FJD).

FIJICLEAR enables the processing of payments to be done as and when transactions incur - hence the term "Real Time". It is an electronic payment within a country and getting immediate settlement of those payments.

In simple terms it means that instead of waiting for several days for funds to be available for use, the receiving party or beneficiary will have funds in their accounts within one business day or in some cases almost instantaneously. Similarly, the party making the payment is assured of safe and immediate delivery of those funds.

The key elements of FIJICLEAR are speed, certainty, reliability, safety and security, convenience and cost.

The system for the transfer and settlement of Fiji dollar denominated funds only. It enables payments instructions to be processed and settled individually and continuously throughout the working day. All settled transactions are considered as final and irrevocable. Thus, the receiver will be able to use the funds immediately without being exposed to the risk of the funds not being settled. This is in contrast to the previous manual system which operated on a deferred net settlement system, where payments are processed throughout the day but the actual entries are only affected at the end of the day.

The Reserve Bank of Fiji (RBF) is the Operator and Supervisor of FIJICLEAR. In addition to monitoring this payment system, its role is to ensure that the banking system has sufficient funds (minimum of FJD 20,000) to operate on and provide clear policies and guidelines to users of this system.


The Reserve Bank of Fiji is the regulator of FIJICLEAR system with five players
who are;

  • ANZ
  • Westpac Banking Corporation
  • Bank of South Pacific Colonial
  • Bank of South Pacific
  • Bank of Baroda

Each of the five players has their own customers for whom they perform the transactions using FIJICLEAR systems with fee inclusive.

Benefits of FIJICLEAR

There are a number of benefits of using FIJICLEAR.

To the Payee i.e. the person receiving money, the benefits include:

  • Funds are credited into the account straight away. So there is no waiting of 3 - 7 days for funds to be cleared when using a cheque;
  • There is time savings as one does not have to physically visit a bank to deposit cheque;
  • There is no uncertainty of any dishonoured cheques with the associated charges and loss of income;
  • Immediate crediting of account means that any overdraft limit is reduced and hence lower interest charges;
  • Immediate crediting of funds will help in cash flow; and
  • Reduced overhead or staff cost as there is less paper work.
  • There are also benefits to the Payer i.e. those making the payments:

  • There is less risk of transporting cheques;
  • There is savings in time and charges; and
  • There is better business relationship with creditors.


Reserve Bank of Fiji has established a secondary site which is online which means if necessary they can operate the system from this alternative site. The site also acts as data backup. In addition, the communication lines are dedicated to the system and are secure. There is a dedicated team in the Reserve Bank monitoring and overseeing the transactions during the day. This team provides adequate liquidity during the day to allow the system to work smoothly. IT backup support and service agreement is in place.

  1. Graduate Schools Home, 2010, in 'What are Information Systems', in International Graduate: The Website for Graduate Opportunities Worldwide, accessed 16th May 2010, from
  2. Information Management System, 2009, ISC Technologies, viewed 16 May 2010,
  3. IT Lecture Notes, 2006, in 'Components of Information Systems', in McKinnon Secondary College, accessed 16th May 2010, from
  4. Investopedia, 2006, in 'Real Time Gross Settlement - RTGS', in Investopedia, accessed 16th May 2010, from <>