Real Time Gross Settlement and Regional Banking Integration Tim Masela, Assistant General Manager: National Payment System Department, South African Reserve Bank

Southern African Development Community (SADC)

SADC Established Established –in April 1980 –9 member states - grown to 14 Principal aims Principal aims –Scale down support from donor countries promote self reliance of member statespromote self reliance of member states –Strongly promote economic growth –Co-ordinate economic co-operation free trade between member states by 2004free trade between member states by 2004

Southern African Development Community (SADC) SECTORAL COMMITTEE OF MINISTERS (Finance) PROJECTS COMMITTEE OF TREASURY OFFICIALS SADC SECRETARIAT COMMITTEE OF CENTRAL BANK GOVERNORS COMMITTEE OF DEVELOPMENT FINANCE INSTITUTIONS SUB- COMMITTEES DEALING WITH FISCAL POLICY ASSOCIATION OF COMMERCIAL BANKS COMMITTEE OF STOCK EXCHANGES

The Payment System Project Structure

Southern African Development Community (SADC) Each SADC country has: Each SADC country has: –An efficient and effective payment system internationally acceptableinternationally acceptable interlinked within the regioninterlinked within the region supporting the SADC aims of:supporting the SADC aims of: –free trade by the year 2004 »cross-border transactions Project Vision

Southern African Development Community (SADC) Pure Strategic Approach Pure Strategic Approach Model-Based Approach Model-Based Approach Operational Approach Operational Approach Different Approaches to Modernisation

Southern African Development Community (SADC) Strategic Strategic Holistic Holistic Fundamentals Fundamentals Capacity building Capacity building Project Approach Technology Issues Risk Issues Financial Issues Legal Issues Payment Business Issues Institutional Issues Economic Issues Environment Issues Team selection Financial management Marketing Communication Process facilitation Project management

Southern African Development Community (SADC) Project launch Project launch Sensitisation Sensitisation Information gathering and stocktaking Information gathering and stocktaking Vision and strategy formulation Vision and strategy formulation Conceptual Design Conceptual Design Business process specification Business process specification Technical specification Technical specification Procurement Procurement Development Development Implementation Implementation Strategic Process

Southern African Development Community (SADC) Involve all key stake-holders Involve all key stake-holders Appoint the champion - project leader Appoint the champion - project leader Analyse budgetary requirements Analyse budgetary requirements Ensure top management support - governor level Ensure top management support - governor level Project Launch

Southern African Development Community (SADC) Raise awareness about payment system issues Raise awareness about payment system issues Common understanding and terminology Common understanding and terminology Identify challenges and opportunities Identify challenges and opportunities Achieve buy-in by key stakeholders Achieve buy-in by key stakeholders Sensitisation/Orientation

Southern African Development Community (SADC) Objective Objective –Analyse the current NPS –Prepare a report detailing the current situation –Identify issues and user needs, strengths and weaknesses –Make preliminary suggestions on the way forward Information Gathering/Stocktaking

Southern African Development Community (SADC) Vision Vision –Desired long term characteristics of the new NPS Fundamental Principles Fundamental Principles –Principles guiding the development, deployment and management of NPS Critical success factors Critical success factors –Yardstick against which success will be measured Strategies Strategies –Aligning the current system with the new NPS Vision and Strategy Formulation

Southern African Development Community (SADC) High level design of business processes and support mechanism High level design of business processes and support mechanism –The Payment Process –The Clearing Process –The Settlement Process –Roles and responsibilities of various players Conceptual Design

Southern African Development Community (SADC) Hardware and software requirements Hardware and software requirements Instrument and message standards Instrument and message standards System availability System availability Security features Security features Technical Specification

Southern African Development Community (SADC) RFP and bidding RFP and bidding Analysis and selection of bidders Analysis and selection of bidders Time, cost and strategic requirements Time, cost and strategic requirements Implementation Implementation Procurement, Development & Implementation

Southern African Development Community (SADC) Although some countries progressed more rapidly – a joint initiative was launched Although some countries progressed more rapidly – a joint initiative was launched September 2000 proposal to CCBG September 2000 proposal to CCBG Development of requirement document for a “SADC Suitable” RTGS (Settlement) System Development of requirement document for a “SADC Suitable” RTGS (Settlement) System –based on common (normalised) requirements Development of an RFP Development of an RFP Evaluation of responses Evaluation of responses SADC Modernisation

Southern African Development Community (SADC) Benefits Benefits –leap in the strategic process for participating countries –cost saving in terms of: determining requirementsdetermining requirements issuing and evaluation of RFPissuing and evaluation of RFP –country specific items could be negotiated at implementation –regional economies of scale: cost of application and licensescost of application and licenses knowledgeknowledge trainingtraining supportsupport SADC Modernisation - “SADC Suitable” RTGS

Southern African Development Community (SADC) Involvement of IT-forum Involvement of IT-forum Appointment of project team and consultants Appointment of project team and consultants Process Process –questionnaires –workshops payment systems directorspayment systems directors business personsbusiness persons IT directorsIT directors core team and specialistscore team and specialists Recommendation made to CCBG in Livingstone, Zambia on Recommendation made to CCBG in Livingstone, Zambia on Final cost + US$ per participant Final cost + US$ per participant SADC Modernisation - “SADC Suitable” RTGS

Southern African Development Community (SADC) IMPLEMENTATION LAUNCHSENSITISATION INFO & STOCKTAKING VISION & STRATEGY CONCEPTUAL DESIGN BUS. PROC SPECS TECHNICAL SPECS DEVELOP/ PROCURE IMPLEMENTATION Timeline

Southern African Development Community (SADC) Highlights Highlights –Capacity building World Bank IDF Grant assistanceWorld Bank IDF Grant assistance –Green Book BIS assistanceBIS assistance –Video project –Guide to payment system modernisation –RTGS and clearing implementations in various countries –“SADC Suitable” RTGS specification SADC Modernisation

Southern African Development Community (SADC) Continued implementations – RTGS and clearing Continued implementations – RTGS and clearing Continued capacity building Continued capacity building Development of a cross-border recommendation Development of a cross-border recommendation FSAP self-assessment project FSAP self-assessment project Updated statistics Updated statistics Development of oversight capabilities Development of oversight capabilities –Move towards a regional oversight body Modernisation – The Way Forward

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