PAYMENT SYSTEMS IN THE ARAB COUNTRIES -Africa- WORLD BANK CONFERENCE REDEFINING THE LANDSCAPE OF PAYMENT SYSTEMS 7-10 APRIL 2009 CAPE TOWN-SOUTH AFRICA RAMZY HAMADEH 1
PAYMENT SYSTEMS IN THE ARAB COUNTRIES ASIA AFRICA 1. BAHRAIN 2. IRAQ 3. JORDAN 4. KUWAIT 5. LEBANON 6. OMAN 7. PALESTINE 8. QATAR 9. SAUDI ARABIA 10.SYRIA 11.U.A.E. 12.YEMEN 1. ALGERIA 2. EGYPT 3. LIBYA 4. MOROCCO 5. SUDAN 6. TUNISIA 7. COMOROS* 8. DJIBOUTI * 9. MAURITANIA* 10.SOMALIA* 07 April 2009 World Bank-Cape Town 2
PAYMENT SYSTEMS IN THE ARAB COUNTRIES Arab Monetary Fund o 22 Countries o Governors Committee o Payment Systems Committee o Payment Systems Development / Resilience o API Arab Payments and Securities settlement Initiative Payment Systems Committee o All Payment Systems Managers o Steering Committee : 5 members o Activities 07 April 2009 World Bank-Cape Town 3
PAYMENT SYSTEMS IN THE ARAB COUNTRIES API Aims to assess and strengthen Payments and Securities Systems in Arab Countries with a view to improving their safety, efficiency and integrity. The long term goal of the Initiative is to build institutional capacity within the region in order to sustain the continued development of payment and securities settlement systems. 07 April 2009 World Bank-Cape Town 4
PAYMENT SYSTEMS IN THE ARAB COUNTRIES The API comprises 3 main elements : Definition of policies actions for regional harmonization and developing common knowledge throughout the region. Assessments of PSSS in the member countries with a view to identifying weaknesses and opportunities. Support the identification of strategies and action plans to foster payment systems reform. 07 April 2009 World Bank-Cape Town 5
PAYMENT SYSTEMS IN THE ARAB COUNTRIES The API Participants : International Advisory Council I A C WB, IMF, BIS, ECB, CPSS, AMF Arab Central Banks. Payment System Committee 07 April 2009 World Bank-Cape Town 6
PAYMENT SYSTEMS IN THE ARAB COUNTRIES The API Approach : Assistance Approach? Meeting senior management and decision makers. Site visits and field work. Assessments. Workshops & Seminars. Optional assessment and conditionality. Cooperation with CEMLA WHI - GCC Consultancy & Expertise 07 April 2009 World Bank-Cape Town 7
PAYMENT SYSTEMS IN THE ARAB COUNTRIES Achievements: i Review existing payment systems in selected countries Proposing payment system strategy o Short and long term improvements Public reports containing a systematic "in-depth report of each country s payment system. Enhancing the resilience of payment systems in advance infrastructure of some Arab countries. Phase one : 14 countries in three years. 07 April 2009 World Bank-Cape Town 8
PAYMENT SYSTEMS IN THE ARAB COUNTRIES Achievements: ii Assessments & visits o Egypt Yemen Morocco Syria Bahrain - Qatar Clearing & Settlements reviews: o Evaluation Study o On going questionnaire. o Practical solutions & developments Publication of White Books Website. Supporting the integration of GCC single currency. 07 April 2009 World Bank-Cape Town 9
PAYMENT SYSTEMS IN THE ARAB COUNTRIES Achievements: iii Principles & Guidance : Documents translations: o Core Principles o PS Glossary o Remittances o Guidance 07 April 2009 World Bank-Cape Town 10
PAYMENT SYSTEMS IN THE ARAB COUNTRIES Difficulties!!! Technology infrastructure Vendors & consultants One service provider! Differences in policy, regulations & financial systems Cost & budget limitations Understanding of the payment system importance. The business case! 07 April 2009 World Bank-Cape Town 11
ARAB AFRICAN COUNTRIES Figures & indicators 07 April 2009 World Bank-Cape Town 12
Country Area km 2 Population Density Per km 2 GDP Per Capita Algeria 2 381 741 34 895 000 15 224.7 b 6 500 $ Egypt 1 002 000 76 030 000 76 477.2 b 6 234 $ Libya 1 759 540 6 420 000 4 74.8 b 12 300 $ Morocco 446 550 31 394 044 70 125.3 b 4 100 $ Sudan 2 505 813 42 272 000 17 107.8 b 2 552 $ Tunisia 162 155 10 327 800 64 77 b 7 500 $ Somalia 637 657 9 133 000 14 5.26 b 600 $ Mauritania 1 025 520 3 291 000 3 6 b 2 011 $ Djibouti 23 200 864 000 37 1.641 b 2 070 $ Comoros 2 170 676 000 311 740 m 1000 $ 07 April 2009 World Bank-Cape Town 13
LEGAL FRAMEWORK-a Pieces of legislation with direct/explicit references to payment systems Country CB Law Banking Law PS law Securities Law Civil Code CB Regulations OTHER Algeria X X Egypt X X X X X X Libya Morocco X X X X X X Sudan X X X X X X Tunisia X X X X X 07 April 2009 World Bank-Cape Town 14
LEGAL FRAMEWORK-b Algeria Egypt Libya Morocco Sudan Tunisia Clarity of timing of final settlement Recognition of electronic processing of payments Non existence of any zero hour rule Enforceability of security interests provided under collateral arrangements and of any relevant repo agreements Protection from third-party claims of securities and other collateral pledged in a payment system x x x x x x x x x x x x x x 07 April 2009 World Bank-Cape Town 15
LEGAL FRAMEWORK-c Algeria Egypt Libya Morocco Sudan Tunisia Dematerialization of securities x x x x Securities ownership transfers through book entries Finality of settlement (securities and funds transfers) Protection of custody arrangements from third-party claims in the event of the bankruptcy of the custodian x x x x x x x x x x x x Securities lending arrangements x x x x 07 April 2009 World Bank-Cape Town 16
LARGE VALUE PAYMENT SYSTEMS Main system(s) used for large-value funds transfers Algeria Egypt Libya Morocco Sudan Tunisia RTGS system Cheque Clearinghouse Other X X X X X X X 07 April 2009 World Bank-Cape Town 17
RTGS Algeria Egypt Libya Morocco Sudan Tunisia RTGS X X X X X X Operator CB CB CB CB Settlement agent CB CB CB CB X Year 2006 2009 2008 2006 X Volume of transactions 147,478 X 100,629 X Value of transactions $ 2,298,898,071,625 362,802,306,065 Swift Network X X X X X X SWIFT CLOSED USER Proprietary Telecomunication. X X 07 April 2009 World Bank-Cape Town 18
ATM POS Algeria Egypt Morocco Sudan Number of ATM S-2006 376 2000 2761 127 Number of ATM S-2004 297 1418 1727 neg POS 2006 nav 26000 15000 75 POS 2004 nav 24202 nav nav 07 April 2009 World Bank-Cape Town 19
RETAIL PAYMENT SYSTEMS Cheque clearinghouse main features Algeria Egypt Libya Morocco Sudan Tunisia Operated by the Central Bank X X X X X Cheques are standardized X X X X X X Processing automated, but physical exchange is required Processing automated, and cheque truncation is used Net balances are calculated and settled once a day X X X X X X X X X X X X 07 April 2009 World Bank-Cape Town 20
RETAIL PAYMENT SYSTEMS Payment card systems main features Algeria Egypt Libya Morocco Sudan Tunisia Local brands dominate X X International brands dominate X X X More than one switch X X more than\ one card processing centre/clearinghouse Settlement through an RTGS X X X settlement in Central Bank money, but not through RTGS X X 07 April 2009 World Bank-Cape Town 21
CROSS-BORDER PAYMENTS AND REMITTANCES most relevant institution in the area of remittances Algeria Egypt Libya Morocco Sudan Tunisia Commercial banks 1 3 3 1 InInternational money transfer operators Local money transfer operators 1 5 1 3 4 5 2 Non-bank financial institutions 5 6 6 Postal service 1 4 2 4 Other 5 5 07 April 2009 World Bank-Cape Town 22
PAYMENT SYSTEM OVERSIGHT AND COOPERATION Algeria Egypt Libya Morocco Sudan Tunisia Central Bank s payment system X X Specific unit or department within the Central Bank X X X segregated from payment system operational tasks X X X 07 April 2009 World Bank-Cape Town 23
PLANNED AND ON-GOING REFORMS TO THE NATIONAL PAYMENTS SYSTEM Current status of the reform process - Legal Framework Algeria Egypt Libya Morocco Sudan Tunisia Conceptual Stage Requirements of law- defined X X Draft Law under Development Implementation X X X 07 April 2009 World Bank-Cape Town 24
PLANNED AND ON-GOING REFORMS TO THE NATIONAL PAYMENTS SYSTEM Reformed elements of the national payments system Algeria Egypt Libya Morocco Sudan Tunisia Legal and Regulatory Framework X X X X Large-value funds transfer systems X X X Retail payment systems X X X Securities settlement systems X X X X FX settlement mechanisms X X Other X X X X 07 April 2009 World Bank-Cape Town 25
THANK YOU Ramzi Hamadeh rhamadeh@bdl.gov.lb 07 April 2009 World Bank-Cape Town 26