The Southern African Development Community (SADC) payment system, led by the Reserve Bank of South Africa, was launched in 1996. Following the initiatives by the World Bank and the Center for Latin American Monetary Authorities (CEMLA), the Western Hemisphere Payments & Securities Settlement Initiative was launched in 1999. In 2004, the World Bank and the regional central banks launched the Commonwealth Independent States Payments and Securities Initiative to develop the payment systems in the former Soviet Union countries. In 2005, the Arab Payments and Securities Settlement Initiative was launched with the cooperation of 22 members and with the support of the Arab Fund. These are some of the successful regional initiatives. All these initiatives have a common vision to ensure that reforms result in efficient and effective payment systems built on international best practice. Within that vision, they assist individual member countries to prepare domestic payment system development strategies and define a coordinated regional approach to ensure safe cross border payments, taking into consideration the implications for trade and investment activities. Another common feature of these initiatives is the availability of well functioning real time gross settlement systems operated either by central banks or, in some cases, by other operators. This is the platform that links the central banks in the group. These regional initiatives have also built institutional capacities within the national economies, as well as in the region, to sustain continued payment system development.
We need to assess these systems against some benchmarks or international norms which would help to increase efficiency, safety and the integrity at national and regional level. In doing so, it may also be useful to look at the benchmarks set by the regional initiatives such as CEMLA, SADEC, CIS, API or other advanced payment systems. Third, the framework need not aim to introduce or formalize too extravagant payment mechanisms for the SAARC countries at this stage, but it should focus on the need to elevate the national payment systems of member countries to a level capable of facilitating present and future trade and investment flows and mitigating risks in cross border transactions. This task can be facilitated by setting up National Payment Councils (NPCs) in their own countries and complying with common standards, harmonization policies and international best practice. Fourth, the framework should broadly include the following: • •  • •  A time targeted vision acceptable to all members. A clear mission accompanied by a statement of the roles and commitment and responsibilities of all members. Policy objectives necessary to facilitate the present and future trade and investment flows within the region. Funding sources, budgetary allocations and an appropriate subscription formula. Guiding principles for mitigating risks and reaping benefits. 7. Road map and way forward  •  If SAARC central bank representatives consent to establish a SAARC regional payment initiative, it will be necessary to appoint an apex body which is capable of taking the reforms forward.