We feel that linked banking provides an opportunity to improve the intermediation role that banks play in an economy. Our Non-Bank Financial Institutions Department will be happy to provide more information on this and other innovative approaches to provision of rural financial services discussed at the said workshop. Update on ZIPSS-RTGS implementation •  •  The Project ZIPSS-RTGS implementation team has successfully undertaken the following activities within the project time frame: •  Development of RTGS policy/position papers;  •  Delivery, installation of BOZ RTGS hardware and software;  •  Conducting of training for BOZ business and IT staff;  •  Conducting of both Business and Technical Functional Tests of BOZ RTGS; and  •  Inspection of Commercial Banks readiness in terms of hardware and SWIFT connectivity. It is important to note that these activities are critical for the successful delivery of the systems within the agreed time and budget. Commercial Banks are therefore urged to ensure that their banks are ready for the next phase which directly affects them. The Implementation Team has put in extra efforts to assist commercial banks to ensure that they are ready within the agreed time frames. Given the importance of the RTGS system, commercial banks must ensure that whatever solution they go for does not compromise reliability, availability, speed and security of the system. On-site examination of commercial bank’s readiness •  The Bank of Zambia on-site examination for commercial banks’ readiness commenced as planned on 22 March 2004.
Update on the microfinance regulations •  The draft microfinance regulations, which are aimed at providing a legal framework for regulation and supervision of microfinance institutions, are currently being reviewed by the BoZ and are scheduled to be submitted to the Minister of Finance and National Planning during the second quarter of 2004. Polymer notes •  As most of you must have heard, through the media, there are public concerns about some features fading on the polymer banknotes of K500 and K1,000. While we have also noticed a number of them, we wish to inform you that fading is a definite and expected feature of these notes as they approach the end of their useful life. However, we also feel that being a new concept, the notes could still be subjected to undue stress testing due to public curiosity. However, we are also not ruling out premature wearing of the notes. We are therefore doing everything possible to ensure that subsequent consignments do not suffer similar setbacks. In the meantime, we wish to make an earnest appeal to all the banks to assist the Bank of Zambia in ensuring that faded notes are quickly taken out of circulation, in the same way as soiled banknotes have been handled in the past. The Bank of Zambia is also going to set up mechanisms for enhancing the process and pace of siphoning faded notes from circulation.