SAARC central banks to develop cross-border payments system

Central banks of the SAARC member countries are planning to develop a system to manage the cross-border payments within themselves at lower cost using latest technology.

It was disclosed at the inaugural session of 17th SAARC Payments Council (SPC) meeting in Cox's Bazar on Thursday.

"The interoperable system to manage cross-border payments using latest technology should be established," Bangladesh Bank (BB) Governor Dr. Atiur Rahman said while inaugurating the programme at a resort.

At least 20 high-ups from the central banks of Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka are participating in the two-daylong meeting. It aims to facilitate trade and investment flows in the region through modernizing payment systems.

He also said effective communication and exchange of information in the region through SPC has helped most of the countries travel the first mile of payment systems with establishment of Automated Clearing House, Electronic Fund Transfer Network, Interoperable ATM (Automated Teller Machine) and POS (Point of Sale), and Real Time Gross Settlement (RTGS).

"The cooperation among the SAARC central banks regarding payment and settlement systems will lead us to the very spirit of the 18th SAARC Summit 2014 - Deeper Integration for Peace and Prosperity".

The BB governor also urged the SAARC central banks to design a process to appropriately contextualize the Sustainable Development Goals (SDGs) at regional level in payment systems arena.

"I believe adoption of a pragmatic and step-by-step approach towards solution of various issues will open up new avenues of cooperation among the SAARC nations," he opined.

Mentioning different initiatives for payment system reforms, Deputy Governor of Reserve Bank of India (RBI) Harun Rashid Khan said RBI has already issued licenses to 11 entities for setting up payment banks.

Under the existing provisions, the activities that the payment banks can undertake are - acceptance of demand deposits of maximum of Rs 100,000 per individual, issuance of ATM/debit cards, providing payment and remittance services through various channels, and acting as business correspondent of other banks. However, they cannot involve themselves in lending activities.

The RBI deputy governor hoped that such initiatives can help boost the ongoing financial inclusion in India.

"We're working to develop a system to manage cross-border payments at lower cost," SPC Chairman and Deputy Governor of State Bank of Pakistan Saeed Ahmed said while replying to a query after inaugurating the meeting.

Among others, BB Deputy Governor Nazneen Sultana and Nepal Rastra Bank Deputy Governor Gopal Prasad Kaphle also spoke on the occasion.

SPC is a regional forum, created by SAARC FINANCE Group at a conference on regional payment group, held at the Central Bank of Sri Lanka in July 2007.

The basic aim of establishing SPC was to develop an understanding to promote cooperation among the member countries to move forward in reforming their national payment and settlement systems, and to facilitate trade and investment flows in the region.

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