People buying or selling a house and businesses trying to shift large sums of money faced delays on Monday after the Bank of England mechanism used for transferring money failed.
The behind-the-scenes payment system – which processes, on average, about £277bn of transactions daily – failed to open as usual at 6am.
The Bank said the retail-time gross settlement system (RTGS) had been hit by a technical issue and could give no indication of when it might be resolved. The largest, most crucial payments would be processed manually.
The system deals with payments as they happen, rather than waiting until the end of the day to process them. This so-called Chaps system processes 92% of transactions between banks and is used to process large-value transactions, such as house purchases. The average payment is £2.1m.
“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. 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,” the Bank said.
Chaps, created in 1984, stands for clearing house automated payment system. It said the “vast majority” of payments were “high-value payments between banks and large corporates, Chaps is most commonly used by consumers when buying houses”.
Andrew Montlake, at the mortgage broker Coreco, said: “If there are going to be Chaps issues then we won’t know yet – transfers usually need to be done by 3pm if someone is to complete on that day. It’s worth adding that Monday is not the biggest completion day – Fridays tend to be the most popular day.”
Chaps usually closes at 4pm each day. This period may be extended to allow any transactions to be processed.
The system for processing direct debits and internet transactions is not affected.
.png?w=600)
