yandraduth googoolye : maintaining the stability of the payments and financial system in mauritius address by mr yandraduth googoolye, first deputy governor of the bank of mauritius, at the launch ceremony of a visa awareness campaign on card safety and security, portlouis, 16 march 2009. * * * mr niehaus 1 distinguished guests ladies and gentlemen good afternoon it is indeed a great pleasure for me to be among you today to launch this “ card security week ”. the immediate effect of an awareness campaign on card safety and security is that users of cards are encouraged to exercise greater care in keeping their cards safe, and other stakeholders, banks, card issuers, merchants to better appreciate the risks involved in the use of cards. as time passes, people tend to relax their attitude because they start feeling that it won ’ t happen to them or firms start believing that they have foolproof systems. therefore it is important to run such campaigns regularly. in the course of this week, a lot will be said and discussed on card safety and security. card safety and security forms part of a broader issue, which is the fight against financial crime. today, i have chosen to share with you some thoughts on how a proper understanding of the responsibilities of the main stakeholders, that is the bank of mauritius, financial institutions and consumers can help in that fight. before proceeding any further, let me set the scene and briefly touch on the situation regarding the use of cards in mauritius. background the growth in atms and in the number of transactions using credit and debit cards has continued to be positive. in december 2008, we had 364 atms and the number of transactions using credit and debit cards stood at around 5 million for an aggregate value of rs11 billion. the number of cards in circulation was 1. 2 million, that is more than one card per adult population. the increased use of cards mirrors an increased sophistication of users of financial products as well as increased financial capability. further, as i had mentioned in one of my previous addresses, it has been empirically established that increased use of credit cards is positively correlated with economic growth and exports. one of our banks introduced some two or three years ago the chip and pin card, an innovation in the card business. i won ’ t go into the technical details of this type of card, but as sandra quinn of apacs, the uk payments association remarked in the banking technology magazine, chip and

pin has proved to be instrumental in reducing card fraud in the uk high street. the increase in card fraud losses in 2008 in uk was due, according to her, to uk card details being stolen and cloned for use in countries not yet upgraded to chip and pin. this brief overview gives you an indication of where we actually stand. i now return to the theme i want to address you today, the responsibilities of the central bank, financial institutions and consumers in fraud prevention. the bank of mauritius has a critical role to play in creating an environment where adequate standards are maintained. it establishes mr charles niehaus is the general manager, sub - saharan africa, visa international cemea region. expectations, norms and responsibilities through regulation. financial institutions on their part need to have adequate it systems and controls to address the risks in their businesses. they also need to provide access to relevant information to consumers of their financial products. informed consumers have the responsibility to protect themselves from the risks that they can best manage. bank of mauritius the bank of mauritius has the responsibility of maintaining the stability of the payments and financial system. this responsibility hinges on the orderly development and efficient functioning of the system. the bank has taken a number of initiatives to further modernize the payments system among which are the cheque truncation project, the implementation of the international bank identification number ( iban ) and the upgrading of the macss. the main objective of cheque truncation is to enable cheques to be exchanged and cleared on the basis of electronic presentment of cheque images and cheque micr codeline data. it provides a number of benefits : faster clearing cycles, faster cheque tracing and cost reduction, the most important one being operational risk reduction through enhanced security and automatic detection of forged instruments. our banks are increasingly engaging in cross border transactions and the bank of mauritius implemented the iban, which provides a secured and transparent means of international fund transfer via straight through processing ( stp ). with a view to furthering facilitation of cross border transactions in the region, the bank will be a participant and the settlement bank in the regional payment and settlement system ( repss ) of the comesa clearing house. the macss represents the main architecture for local electronic payments involving the bank of mauritius, banks, government and large taxpayers. this core application, which is based on international best practice, was recently replaced. it provides for advanced queue management for liquidity purposes, enhanced security, increased availability and