March 30, 2008 (LBO) – The emergence of non-bank entities that issue cards for payment services are a threat to traditional commercial banks, a Sri Lankan central banker said. The payments system is being transformed by new information technology and the integration of financial markets which has led to the emergence of non-bank actors, said Ranee Jayamaha, deputy governor of the Central Bank.
“The emergence of non-banks in the payments system, playing a prominent role in introducing significant new developments, is a further by-product of this transformation,” she told a meeting of south Asian central bankers in Colombo Friday.
“Banks still remain at the forefront of change, but the speed at which non-banks advance in these new areas of activity, is a significant threat to banks,” she told the launch of the SAARC Payments Initiative (SPI).
“This trend is now emerging in Sri Lanka too where non-bank card issuing agencies have begun to compete with the banks in providing payment services.
“These changes have prompted central banks, in pursuit of their mission to ensure the smooth functioning of payment systems, to establish structured oversight functions to f