In this regard, we had introduced the Pricing Reform Framework as well as the Payment Card Reform Framework. Correcting price distortions In May 2013, BNM had introduced the Pricing Reform Framework to correct the price distortions between paper-based payments and e-payments. By differentiating the prices of payment services according to their relative costs, the public are thus incentivised to use the more efficient and cost-effective e-payment services. In this respect, we need to explore new incentives that can accelerate the migration to epayments. Strengthening competition and lowering cost To curb the rising cost of payment card acceptance that had impeded the expansion of payment card terminals among merchants, BNM had implemented the Payment Card Reform Framework in July 2015. The Reform Framework had removed market distortions and imbued competition and transparency in the payment card market. This has resulted in the offer of higher quality and lower cost solutions, especially to the lower tier merchants. Driving infrastructure building and network expansion To facilitate infrastructure building and enhancements to payment services, BNM had also established market incentive structures such as the e-Payment Incentive Fund (ePIF) Framework. Under the ePIF Framework, banks are incentivised through a set of prerequisites to invest in e-payment services, and to channel the cheque fee collected as incentives to encourage their customers to migrate to e-payments. The industry players had also established a Market Development Fund (MDF), which would channel approximately RM455 million to expand the network of payment card terminals from 240,000 in 2014 to 800,000 by 2020.

Allow me to mention some reasons for this conviction and offer some avenues for actions: –  First, French banks, which have complied with Basel 2.5 rules since December 2011, are in a strong position to meet the new capital adequacy requirements when they come into force. Moreover, French banks are ahead of the Basel III schedule. Currently with Core Tier 1 capital ratios of over 9%, the main French groups demonstrate their ability to meet the European Banking Authority deadline of 30 June 2012. They should also fully comply with the new Basel III requirements by 2013. –  The ACP is closely monitoring credit institutions’ preparations for Basel III. By doing so, any problems can be identified at an early stage and issues relating to its implementation can be addressed, which I believe is essential for a smooth transition. More generally, in addition to the individual monitoring of banks’ preparation, coordination between supervisors and the players concerned is also important to ensure a clear understanding of the rules and identify any questions relating to the reform and their potential consequences. The ACP liaises on a regular basis with the profession on all prudential matters. Indeed, today’s conference is a prime illustration of this. –  It is also essential to closely monitor and take into account the impact of the new regulations on the financial system and the economy and to assess the different interactions in order, if necessary, to deal with the unforeseen consequences of Basel III.