UK real-time inter-bank payments systems goes down

Bank of England admits that the Real-Time Gross Settlement system has been down all day after discovering glitch during routine maintenance

The system that process major payments between financial institutions in the UK has gone offline today, according to the Bank of England, preventing house purchases from being finalised and big payments between companies from being executed by their banks.

According to the Bank of England, the system has been down for most of the day after technical problems were identified with the Real-Time Gross Settlement (RTGS) payments system.

"The Bank of England has identified a technical issue related to some routine maintenance of the RTGS payment system and has paused settlement while we resolve it," admitted the central bank in a statement.

"We are working to address this issue as quickly as possible, and restart the RTGS payment system in a controlled manner. The most important payments are being made manually and we can reassure the public that all payments made today will be processed."

However, smaller payments - such as standing orders and direct debits - use a different system and have not been affected by the outage.

The system has been down since 6am this morning. Major banks were contacted early in the day by the Bank of England, which only publicly disclosed the fault at around 11.30am.

RTGS routes payments made through the Clearing House Automated Payments System (CHAPS), which settles important and time-sensitive payments, including house purchases and trade deals.

CHAPS processed some £70 trillion of payments in 2013 and is used by 5,000 financial institutions operating in the UK, including Barclays, Lloyds, NatWest and Nationwide.

The RTGS helps maintain liquidity in the banking system by making sure that payments are made instantly, with RTGS acting as an intermediary, crediting to one bank and debiting from the other in real-time, removing risk, uncertainty and latency from the payments process.