through the payment and settlement systems act of 2005. the act empowered the central bank to be the authority responsible for the national payment system, which requires oversight and continuous surveillance of all payment systems to ensure its efficiency and effectiveness. the systemically important payment systems will be reviewed periodically to ensure that the design and operation meet with international standards and best practice. some of you may be aware that a couple of months ago, the central bank established a national payments council which is the highest decision making body with regard to payment systems. this committee represented by all stakeholders provides a forum for constant dialogue on payment issues to take place within the industry. the national payments council is responsible for developing the payment and settlements infrastructure in collaboration with all the relevant authorities and stakeholders. currently, it is in the process of finalizing a road map for the development of the national payment system in the next five years, which will be in line with the vision of the financial sector. in implementing the road map, it is vital that all stakeholders in the payment system understands the significance of payment systems, their impact on financial stability and take ownership and leadership. most central banks at some point or other have been owners, operators, catalysts, overseers and users of the payment system. over the years, central banks have given up their ownership and operator ’ s role and, in some cases, even the catalyst role. banks and financial institutions and even the corporates should play an important role in shaping the national payment system in sri lanka. let me conclude now by giving an important message. payment reforms help to adopt best practices by all stakeholders. with or without payment system reforms, banks and financial institutions should be able to meet their payment obligations. some of the benefits enjoyed by banks and customers over the years will no longer be there under the cit system. the public too has to make adjustments in their payment practices and ensure that there are funds in their accounts when cheques are issued. all stakeholders should change their past practices and fall in line with reforms which are aimed at improving facilities. once again, i thank the royal bankers club for inviting me and extend my good wishes for all its future activities.

ranee jayamaha : saarc payments initiative and policy responses speech by dr ranee jayamaha, deputy governor of the central bank of sri lanka, at the inauguration of " saarc payments initiative ", central bank of sri lanka, colombo, 28 march 2008. * * * 1. it is with great pleasure that i thank all of you for attending the inaugural session of the saarc payments initiative. it is indeed a historic event and a landmark in the development of payment systems in the saarc region, because this is the first time the member central banks, as a group, have decided to pay focused attention to this area of activity. it is also an important achievement for the central bank of sri lanka to be able to pioneer the efforts in establishing the saarc payments initiative. 2. the saarc payments initiative, which is launched today, intends to • assist individual saarc countries to prepare a domestic payment strategy and a forward looking development plan ; • design a coordinated regional approach to cross - border payments, taking into consideration the implications for trade, investment, central bank policy, foreign exchange positions and their management ; and • clear any impediments experienced by the members in the areas of policy, operations and communications, legal and regulatory aspects, technical and institutional infrastructure, and engage in research and statistical analysis. 3. during the course of the saarc payments initiative, member countries will be able to learn from the efforts and experiences of developments of payments within the region, as well as outside. some of our member countries may have to acquire modern communication infrastructure and advanced payment systems to support the delivery of the payment and settlement services required, not only by their own markets, but also by the regional market. in effect, the saarc payments initiative will be able to : ( a ) guide the efforts of member countries in modernizing their national payment systems ; ( b ) assist in establishing appropriate technological links with others in the region ; and ( c ) bring their payment systems to appropriate standards compatible with international standards. 4. the importance of payment systems 4. 1 the broader term “ payment systems ” includes not only payments, but also clearing and settlement systems. payment systems represent a basic infrastructure for the functioning of market economies and in developing more inclusive financial systems, including enhancement of access to finance. the soundness and efficiency of payment systems are fundamental to the stability of the currency, as well as the financial system and, therefore, to sustaining