##s project itself started in 2005 under mr b r gujadhur, then first deputy governor of the bank. the banking community has been closely associated with the project right from day one. in 2007, there was an exploratory mission to hong kong and singapore, which was headed by the present first deputy governor of the bank. the ceo of mba also formed part of the delegation as did banking industry representatives. unfortunately, we ran into some administrative hurdles on the way, and the project found itself delayed considerably. the cts, which we are preparing to launch, is only the initial phase. in fact, more advanced systems of cheque truncation cater for image capture directly at points of sale ( pos ) and atm ’ s – as is the case in india for example. as we implement other stages of the cts, bank customers will not have to go to their banks ; truncation will be done at the pos. we are also launching the bulk clearing system ( bcs ) which is a missing block in the mauritian payment system. the bcs will cater for high - volume, low - value transactions such as salary payments, standing orders and direct debits. in the next phase, we envisage the implementation of a national switch to cater for card and pos transactions. the need for the cts the cheque is currently the most visible and most widely - used instrument of payment in mauritius. currently it represents around 20 per cent of all non - cash transactions. in spite of several modes of electronic payment that banks have put at the disposal of their clients, an average of 21, 000 cheques pass through the plach each day, for an amount of almost a billion rupees – representing 20 per cent of total macss transactions. if we take into account the number of intra - bank cheques, the daily volume of cheques approximate 50, 000 for a value exceeding 2. 6 billion rupees. these are serious numbers! over the past five years, the volume of cheques handled by the plach has remained in the range of 5. 2 million to 5. 4 million annually, with the aggregate value constantly on the rise. we had to find a way to cope with this avalanche of cheques. cheques, as debit instruments, come with an intrinsic settlement risk. a large proportion of unpaid cheques in the payment system may lead to systemic risk. it is our responsibility to ensure that such

the plach, a room of around 20 square metres is situated on the premises of the bank – at times there can be around 20 people in a room of this size. there, the cheques are exchanged among the banks and the representative of each bank transports back his bank ’ s cheques to the head office where the verification of the cheques is carried out manually. the cheques that are in order are honoured, those that are not, are returned at the second clearing on the next day. the resources mobilized by the cheque clearing process total some 300 persons putting in some 325 person - hours on a daily basis, including the transport of cheques from the respective banks to the plach, and back. this process has been going on for the last 44 years. in 1968, the mauritius clearing house was processing an average of 2, 000 cheques daily ; today the number has multiplied tenfold. it is high time to move to a more modern system. the cts will reduce work time and manpower and bring efficiency in the entire banking system. it will benefit customers who will find the waiting time to get access to their funds ( float time ) cut down from an average of two to five days to one to two days. bis central bankers ’ speeches with the cts, we will align ourselves with countries like singapore, india and malaysia. in sub - saharan africa, we are among the pioneers of the system. the implementation of the cts constitutes a key element of our financial sector development plan. the cts in the cts, the physical cheque which enters the banking system for clearing is processed from this point onwards by the digital image of the cheque – there will no longer be an exchange of physical cheques, as is currently the case. the cts project is part of the bank ’ s strategy of modernising the payment and settlement system. as you are aware, the management of the payments and settlement system is part of the functions of the bank. the bank with our commercial bank partners are endeavoring to make the system more efficient and reliable. the process of modernization started in 2000 with the implementation of the macss based on real time gross settlement principles for large - value transactions. then, came the automation of the port - louis clearing house which i mentioned earlier. other important milestones were the legal amendments to the bank of mauritius act and the bills of exchange act to pave the way for the introduction of an electronic clearing system. work on the ct