for banks. cheque imaging makes it easier to detect fraudulent transactions as electronic processing facilitates signature authentication, curtailing forgery and other cheque alterations. it also clears the arteries of business and finance. funds become available faster as the clearing cycle is shorter. the significant reduction of the float - time enables a better management of cash flows and working capital for economic operators. the cts will add to the convenience of cheques and may even stimulate their greater use as there are, at present, many merchants who are reluctant to accept cheques for reasons of security and liquidity. over and above its benefits, the cts also has an emblematic value. it illustrates our unrelenting quest for change, for innovation and for new technology to achieve greater bis central bankers ’ speeches efficiency in the banking industry, to enhance our banking experience and to increase our competitiveness, especially on those vital pillars of the gef rating for efficiency enhancement and technical innovation. it is not surprising therefore that the news of the new mauritian system is already exciting the curiosity of other countries and we have had over the past two years delegations from central banks of kenya, nigeria, papua new guinea, rwanda, seychelles and uganda, visiting us to learn more about our new system which we are putting in place. the cts is here. but our quest for efficiency enhancement and innovation continues. so let me give you a very brief overview of what you may expect from the bank of mauritius in the months ahead. – first, we shall extend the cts to the accountant general ’ s office so that treasury officers will be spared their daily trudge to the bank ’ s counters, carrying a sackful of paper cheques. they will be able to scan and digitize their cheques and transmit them for clearance just like the clearing banks. – second, we shall examine with the mauritius revenue authority whether it may also benefit from similar arrangements. we greatly value our collaboration with mra and it was in response to their requirement that we introduced a multi - currency payment facility which assisted us to obtain the mandate to run the comesa repss ( regional payments and settlement system ). – third we are also implementing a bulk clearing system for deferred net settlements, compliant with the world bank and bis recommendations, this will allow low - value high - volume regular transactions such as payrolls, standing orders, direct debit cards and point - of - sale transactions to be incorporated in the electronic system. – fourth, we begin

banking sector – which is exactly what we aim to achieve with the cts which we are rolling out this evening. despite our skilled navigation, we remain exposed to the financial distress and the sovereign debt crisis of the western world. any step we can take to increase efficiency and complete financial transactions more rapidly to reduce the need for working capital, will help us to elude the general slowing of the world economy and the adverse impact of the faltering recovery elsewhere. second, we should not be surprised if some of the international bank branches and subsidiaries which are operating in our country are affected by the policies being pursued by their overseas parent. we can seek to insulate our jurisdiction a little by insisting that any future international bank, that sets up operations in mauritius, does so via a subsidiary. third, it is vital that we address issues going under the seemingly - innocuous triple acronyms of lcfi, sifi, and tbtf. telling ourselves “ it won ’ t happen here! ” won ’ t do. we must come to grips with lcfi ’ s, large complex financial institutions, especially those that are sifi ’ s, systemically important financial institutions, and may qualify as tbtf, or too big to fail. this last point is particularly troublesome for a small economy. we have a high degree of concentration in the banking sector, with the hirshman - herfindahl index standing at 2024 in june this year, which is unusually high and well above 1800, the entry point for high concentration. the top two banks, both local, have total domestic assets which exceed by more than 30 per cent the combined assets of all the other 15 banks which have domestic operations. we have associated problems arising from the concentration of asset ownership in the country − which makes it very problematic to apply such notions as “ independent directors ”, “ related party transactions ”, or to have recourse to such prudential principles as the regular rotation of auditors and so forth. these may become a source of vulnerability and undermine financial stability as contagion can spread rapidly through the domestic banking and financial system. more pointedly, some of the banking groups have just become too large and too diversified for the central bank to supervise as effectively as we would wish with the resources at our disposal. we intend to work with the banking industry, and in particular with the banks directly concerned, to ring - fence domestic banking operations which will be subject to full supervision including risk - based and macro