Year 2000 Preparations in the Australian Banking and Financial System 6. The Reserve Bank's Internal Preparations for Year 2000

6.1 The RBA's Year 2000 Project

The RBA's systems, services, processes and facilities are Year 2000 ready.

The RBA began its technical preparations for the Year 2000 problem in 1996. Since 1997, the Year 2000 project has been controlled by a Steering Committee which reports to the Governor and to the Reserve Bank Board. The Steering Committee, which is chaired by the Assistant Governor (Corporate Services), receives direct reports on progress from all business areas. Audit Department reviews the project to identify risks, and provides an independent check on reported progress.

The project was managed through the establishment of a formal set of milestones. These required the completion of an inventory of all software and hardware, vendors, etc; assessment of the scope of potential problems; remediation of problems identified; exhaustive testing of systems; implementation of the modified/new and tested software; and sign-off by departments. These steps have all been completed successfully. The final milestone is contingency planning, due for completion by September 1999. While the RBA has a range of existing contingency plans in place, an assessment of likely Year 2000 risks has been made and, where required, additional safeguards are being introduced.

A preservation strategy has been implemented to ensure continued Year 2000 compliance throughout the remainder of 1999.

The cost of the Year 2000 project is estimated at around $5 million, the bulk of which is for existing staff redeployed from other activities.

6.2 External Year 2000 Testing

The RBA and its customers are major participants in the payments clearing systems. The RBA has concluded its participation in the testing of the external payments clearing streams conducted by APCA (refer Chapter 5.2). The testing confirmed that the relevant systems are Year 2000 compliant.

In addition, the RBA provided testing facilities for its customers. Testing was successfully undertaken with a broad range of customers, including several key Government agencies.

6.3 Cash

The RBA is supplementing its normally significant buffer stocks of notes in anticipation of additional demand for currency notes in the lead-up to the Year 2000. This is being done by printing a quantity of notes in addition to its normal requirement in 1999, and by retaining some used notes that would otherwise have not been reissued on quality grounds.

The RBA is also liaising with banks, building societies and credit unions, as well as armoured car companies, on arrangements for the distribution of cash. Later in the year, the Bank will distribute additional notes to financial institutions to ensure the ready availability of currency around the Year 2000.