Business Times

Financial institutions must adopt modern payment systems : Cabraal

By Sunimalee Dias

Central Bank Governor Ajith Nivard Cabraal has said modern systems need to be used to meet requirements of a rapidly growing economy. He said that financial institutions and LankaClear need to introduce modern and efficient payment systems to meet the demands of a rapidly growing economy. The Governor was recently addressing the fifth anniversary of the LankaClear, the country’s national clearing house.

Ideally, he said the growth of payment systems and infrastructure should precede the growth of the economy and expressed confidence in LankaClear to take the necessary steps for the timely implementation of the new payment infrastructures to facilitate the goal of doubling the per capita income by 2015.

Cheque Imaging and Truncation System introduced by LankaClear has enabled the company to process cheques upto 200,000 compared to its previous 5000-10000, LankaClear Chairperson Priyanthi Liyanage said.

CITS is an image based cheque-clearing system which replaces the physical movement of cheques with electronic information flowing throughout the clearing cycle. The elimination of the need for the physical transfer of cheques for purposes of clearing greatly enhanced the security and efficiency of the clearing process, enabling banks to achieve next day clearing and cheque realization as well as extending customer deadlines for cheque deposits for T+1 clearing.

Administering a product portfolio centering around services to the banking industry, LankaClear offers a multitude of services designed to facilitate efficient payments. These include the Sri Lanka Interbank Payment System (SLIPS) which is an online interbank electronic fund transfer system enabling the same day transfer of funds in a highly secure environment. The introduction of the US Dollar Clearing System has significantly expedited the realization of US Dollar cheques and drafts, bringing tangible benefits to customers while significantly improving banking efficiency.

In addition, the company addressed the paramount need for utmost security in online transactions by incorporating a Certification Authority, shouldering the responsibility to provide digital security certificates for the financial sector. The provision of this service has eliminated the prohibitive dollar cost to banks of obtaining the certificate from foreign certificate service providers.

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