July 06, 2007 (LBO) – South Asian countries need to modernise their payments systems to cope with rapidly increasing cross border trade and investment flows trigged by faster economic growth, a senior central banker said Friday. “Trade and investment flows and demand for financial services will exceed the present levels over the next couple of years,” Sri Lanka Central Bank deputy governor Ranee Jayamaha said.
“Hence, the payment system gains much importance as it is a critical facilitator in cross-border flows, as well as domestic transactions. It should be able to cater not only to present needs, but also future demands.”
Most south Asian countries had either opened up or were considering opening up their capital accounts and were growing fast, she told a conference in Colombo of senior officials from South Asian central and commercial banks.
They are discussing the setting up of a regional payment system.
Modern payments systems are required to facilitate cross border trade and investment flows through appropriate payment instruments, clearing mechanisms and settlement systems, Jayamaha said.
“The rapidly changing global payment system infrastructure is challenging the existence of domestic and regi