This initiative would ensure that all the payment and settlement systems in the country are subject to good and efficient governance and that they adopt the best practices in risk management which is a prime requirement relating to a safe, secure and efficient payment and settlement systems. These arrangements should facilitate easy transition to a more formal statutory system.
Economic literature stresses two elements that add credibility to such commitments: strong institutional frameworks setting out clearly defined objectives; and the adoption of “rule-type behaviour” that consistently and predictably determines the response of policy-makers to specific circumstances. These elements allow a policy-maker to steer the expectations of other actors in line with its long-term intentions, thereby mitigating the time inconsistency problem.