Under these new arrangements, banks now participate in a daily tendering system, based on repurchase agreements (repos), to obtain funds from or repay funds to the Reserve Bank. To this end, the settlement system became a convenient vehicle to establish market liquidity needs and to facilitate payment flows, resulting from repo transactions, between the Reserve Bank and the banks.
2.1 Features of the new settlement system The introduction of the new interbank settlement system represents a major reengineering of the way in which banks exchange value amongst themselves.