to provide funding to each other, resulting in the freezing of the wholesale money market in several developed economies. this resulted in short term liquidity to evaporate affecting participants that were too dependent on the market for funding. this largely stemmed from poor liquidity risk management practices, and has now prompted the basel committee to develop new proposals for global liquidity management standards. in the context of islamic finance, the impact of the proposed basel requirement to maintain sufficient cushion of high quality liquid assets needs to be carefully considered, as the infrastructure and tools for liquidity risk management by islamic banks is still in its infancy in many jurisdictions. a very narrow definition of liquid assets that is currently proposed may exacerbate liquidity risks in many islamic financial markets in which islamic banks compete with conventional counterparts for the limited stock of shariahcompliant government securities. this will certainly increase compliance cost and render the market illiquid when the demand exceeds supply, placing islamic financial institutions at a disadvantage. the importance of a robust liquidity management infrastructure for islamic financial institutions is well - recognised. the growing internationalisation and cross - border activities in islamic finance in recent years further accentuates the importance to enhance the ability of the islamic financial system to withstand shocks from externalities. moreover, access to a robust liquidity management infrastructure will reduce the cost of intermediation which is an important enabler for a more efficient and competitive islamic financial system. recognising that liquidity management in the islamic financial system is still under - developed, a liquidity task force was established by the ifsb in 2009 with the aim to formulate an institutional arrangement to address this need. significant progress has already been made in this endeavor with several key proposals now at the final stage for operationalisation. when operationalised, this liquidity mechanism will be another landmark development for islamic finance. conclusion the recent global financial crisis has spurred the resolve of the world community to chart a new course towards greater and lasting social and economic stability with fairness and accountability. whilst this presents a unique opportunity for islamic finance to transition into the next development stage of greater international integration, there needs to be a higher level of resilience to withstand the new challenges it will bring. this, in essence, requires the strengthening of the financial infrastructure to preserve the soundness and stability of the islamic financial system. indeed, our collective will to mobilise a higher level of global cooperation in promoting this outcome will enhance the prospects of islamic finance to contribute towards securing global

45. 6 % on a year - on - year basis for the first half of 2014 compared to 12. 4 % for the same period last year. likewise, cheques declined at a faster pace of 9. 8 % or 10 million cheques for the first half of 2014 compared to 2 % or 2 million cheques for the same period last year. while the data suggests some improvements, more need to be done. a particular area that requires huge efforts is the distortions in the debit card usage in malaysia. despite a seemingly high debit card penetration of about 19. 2 million “ active ” debit cards in contrast with 5. 5 million “ active ” credit cards, the per capita debit card transaction is only 1. 7 compared to 11. 3 for credit card in 2013, indicating a ratio of 1 debit card transaction to about 6 credit card transactions. acquirers charge merchants the same merchant discount rate ( mdr ) for the acceptance of debit and credit cards despite their differing cost structure, which makes debit cards just as expensive as credit cards. it is difficult to comprehend the charges imposed on debit cards, which have ready cash in them, is similar to the charges on credit cards. there has also been a slowdown in the growth rate of pos terminals in malaysia since 2012, which indicates a potential saturation of pos terminals at those merchants who can afford the mdr. this is further compounded by increases in interchange fees which are likely to cause the mdr to be raised to even higher levels on a system - wide basis, thus hindering the wider expansion of the pos network and depriving society from the convenience of using costeffective payment cards. the debit card should be positioned as a cost - effective payment card to make it more affordable for small merchants to accept card payments. the expansion of the pos network would allow for wider acceptance of the debit card to be used more pervasively, to displace the use of cash, thus bringing about cost savings for the country in the long run. to correct the distortions and promote competition in the domestic payment card market, a payment card reform is certainly timely to stem the indiscriminate increases in interchange fees and correct the price signals with the view to widen the pos network especially in non - traditional industries and rural areas. 2. development and sharing of infrastructure investment to be successful, e - payment solutions must not only be affordable,