cards as a percentage of the outstanding dues under the cards are very high. these often arise as a result of inadequate appraisal of the cardholder and to an extent can also be attributed to the high interest rate charged on the carry forward balance. in fact, one could see a chicken and egg relationship here since the high interest rate is sought to be justified by the high percentage of delinquencies in the card segment. another manifestation of e - payments is the use of e - money which is popularly called e - wallet. this product is not yet available in mauritius. they are like prepaid cards which can be used for different types of transactions. these cards could cause problem for the payment system, may result in loss to the card holder or merchant in the event of failure of the issuer and has implications for the monetary policy formulation as they function as store of value. but we will all agree that the benefits of the e - payment system for economic developments far outweigh the concerns which, moreover, can be mitigated through proper systems, processes and adequate awareness among the public. the fact that at the initiative of european commission and european central bank, efforts are underway to develop a new european payment card system within the implementation of single euro payment area agreement shows how important e - payment cards are becoming for the stability of payment system both from a financial and the social stand point. in the mauritian context, it might be worthwhile to explore the feasibility of introducing shari ’ ah compliant e - payment instruments given that we have decided to introduce islamic financial services in the country. no address by a central banker at this juncture would be complete without a reference to the current global financial crisis. the present turmoil which originated in august 2007 as a fall out of what is now famous as the sub - prime crisis has accentuated in the wake of it taking a toll of systemically important financial institutions in the usa and later in europe. the various measures being taken by the different central banks and governments are also too well known. as far as mauritius is concerned, we can vouchsafe that the banking system is stable and sound. however, we have constituted a multi disciplinary cell comprising senior officials from different functional areas of the bank of mauritius to monitor the domestic and international events on an on - going basis. this cell meets daily, reviews the developments and makes its assessment of the situation. the banking system in mauritius of late witnessed some tightness because of local seasonal factors

to the bank as well as to certify that the financial statements represent a true and fair picture of the affairs of the financial institutions. sound credit risk management is a key factor in the accuracy of expected loss models. the bank of mauritius issued a guideline on credit risk management back in 2003 which establishes sound principles of credit risk management whilst at the same time establishing the responsibilities and accountabilities of senior management and the board of directors. there are several other regulations regarding credit risk management and adequacy of provisions which in addition to the ones i have just stated will assist in the maintenance of the safety and soundness of banks and other deposit taking institutions through the transition period. will the new standards on ifrs 9 help to avoid the next crisis? the concept of expected credit loss model aims to recognise losses adequately and in time. it will address the ‘ too little and too late ’ provisioning problem. however, the model itself will be largely dependent on underlying data, expert judgement, subjective estimates of macroeconomic parameters as well as adequacy of the internal control framework notwithstanding the it infrastructure and analytics. subject to these challenges being effectively addressed, boards and senior management of banks will take informed decisions to proactively manage provisions. banks ’ senior management, board of directors, external auditors as well as supervisors all have a critical role to play in the smooth transition and implementation of the new prudential accounting regime. thank you. 3 / 3 bis central bankers'speeches