it is necessary to get the commitment and consent of central banks in forming the regional payment initiative. second, it is necessary to engage in a stocktaking exercise to gauge the effectiveness and appropriateness of the existing payment instruments, payment systems, clearing mechanisms, settlement systems and infrastructure in the region to identify their weaknesses, inefficiencies, safety levels and risks. 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. the member countries can decide on an appropriate name and the structure of the apex body. for convenience, i have taken the liberty to name it as the saarc payments council ( spc ) which can be chaired by a member central bank or co - chaired by two central banks. the council should draft vision and mission statements for the saarc region and prepare a road map for payment reforms for the next 5 – 10 years, taking into consideration the modernization that needs to be attended to by member countries at national and regional levels. under spc, there should be several task forces consisting of senior officials of central banks and other financial institutions directly involved

##gating its tragic final outcome into sub components of devices employed, each such sub component teaches us a valuable lesson. these lessons, when viewed from a centric point, boil down to two important aspects of microfinance : the governance structure which microfinance institutions have to adopt and the self - discipline which microfinance beneficiaries should cultivate. both these important elements in microfinance should not be mere eye - washes to satisfy someone who demands of such behaviour by the respective parties. they should be faithfully and vigorously followed in order to prevent the microfinance industry from meeting with an untimely death. what normally happens in sakvithi - style investment schemes? sakvithi episode is a classic example of the ability of shrewd persons to exploit society ’ s desire for accumulating quick wealth by skipping the hard path which it should normally take. hence, it is also an exploitation of people ’ s desire to become rich. this desire is embedded equally in both the poor and the rich : the poor to get out of poverty quickly and the rich to become richer and more influential. hence, the schemes of quick high returns are craftily designed to satisfy this psychological desire. many schemers who pose as micro - financiers too resort to this tactic and the poor unknowingly fall victim to their schemes. the modus operandi of such schemers has been the same. they would form a microfinance institution because it is in high vogue today and the society is ready to accept it as social responsibility which one should perform for community ’ s benefit. this explicit social legitimacy allows them to operate under the umbrella of microfinance which is artificially boosted by appropriate marketing and fitting propaganda. in this manner, savings are mobilised from the poor and funds are raised from the donors. eventually, the end - use of resources is not for helping the poor, but for siphoning for other activities. when such activities do not generate a continuous income sufficient to meet the obligations to depositors, the micro - financier is not left with a choice, but to default the savers who had placed their trust in him. the end result is the deep suspicion which the poor would have about the entire microfinance industry. the authorities too would view microfinance as a destabilising and fraudulent element in the financial system. this leads to a credibility issue and a reputation risk in microfinance industry. once the