##office systems to accept electronically presented cheque information and link branches to the central cheque clearing center at lankaclear to provide end - to - end cheque processing, by crediting the proceeds to customers ’ accounts on t + 1 or t + 2. this has had a significant impact in the rural and outstation areas in sri lanka, where businesses waited for 7 days or more to get cheques cleared. the system has also helped to reduce geographical barriers between regions and districts. small businesses have begun to roll over finances better and faster. however, although it is advantageous to customers, the inefficiencies inbuilt in paperbased instruments continue to remain. where possible, therefore, the use of cheques should be discouraged. 3. 4 promote electronic retail payments and telecommunication systems : the first step towards promoting electronic retail payment systems is to provide low cost current and savings accounts that can be accessed with a cash dispenser card. the use of non - cash payment instruments, in particular, mobile and telephone banking can be promoted together with the use of high security standards, which would ensure reliability of the payment instrument. although the payment options for e - commerce or e - money are catching up, there still remains a significant demand for increased efficiency in the delivery channels of these instruments. the atm machines have now extended their scope to provide a wide range of services. singapore has introduced an e - giro system, which enables participating banks to effect transactions using browser - based pcs at their offices, while in other countries, rural and small businesses access through the use of telecommunication facilities is fast developing. 3. 5 introduce common payment switches ( cpss ) : the cpss can be used for managing the clearing of retail fund transfers initially among banks, but they are common platforms for local retail transactions, online real time fund transfers and for miscellaneous retail payments across banks. through cpss, both operators and customers will enjoy benefits of service outside banking hours, reduction of administration work and paper handling, on - line availability of information, ability to integrate future services, reduction of settlement risks on retail transactions, etc. accordingly, the participating banks will be able to effect customer / bank initiated transactions relating to : third party transfers ( account - toaccount transfers ), bank transfers, bill payments, inward remittances, statutory payments such as taxes, local government rates, inter - bank transactions, direct debits and local credit card transactions. above all, cpss

bank of japan ’ s july report of recent economic and financial developments1 bank of japan, 16 july 2003. * * * the bank ’ s view economic activity remains virtually flat. with regard to final demand, business fixed investment is on a gradual recovery trend, albeit showing some fluctuations. meanwhile, private consumption continues to be weak, housing investment remains sluggish, and public investment is declining. net exports are virtually flat. industrial production continues to be basically level in response to these developments in final demand. corporate profits continue to recover, although the pace is moderating. under these circumstances, uncertainty regarding the economic outlook is diminishing somewhat, and business sentiment is improving to some extent, mainly among large manufacturing firms. as for the employment situation, the number of employees including non - regular employees such as temporary workers has almost stopped declining. however, the increase in the overtime hours worked and new job offers has come to a halt. firms are maintaining their stance on reducing personnel expenses, and household income still continues to decrease as wages are on a downtrend, albeit gradual. thus the employment and income situation of households overall remains severe. turning to the economic outlook, a widely shared view of the prospect for overseas economies is that the growth rate, especially that of the u. s. economy, will accelerate in the second half of this year reflecting diminished geopolitical risks. for the time being, however, the pace of recovery in the u. s. economy is projected to remain very gradual. moreover, economic activity in east asia has decelerated somewhat, due partly to the slower growth of domestic demand in south korea and the epidemic of severe acute respiratory syndrome ( sars ). in this situation, both exports and industrial production are projected to remain virtually flat for the time being. with respect to domestic demand, public investment is projected to follow a declining trend, and private consumption is likely to remain weak for some time due to the severe employment and income situation. meanwhile, the uptrend of business fixed investment is expected to become established in the period ahead, mainly in large manufacturing firms, whose investment has been thus far significantly restrained despite the recovery in their profits. however, the pace of increase in overall business investment is likely to remain modest, as long as uncertainty regarding a recovery in exports and production remains. overall, assuming that the growth rate of overseas economies accelerates in the second half of this year, the uptrend in exports and production will resume gradually, which in turn