Gulf Cooperation Council (GCC) member states are gearing up to establish a unified coordination scheme for linking payment systems at a time central banks are building the regional infrastructure for a cross-border real-time settlement system.
Saudi daily, Umm Al-Qura, revealed that the GCC council of ministers has agreed to establish and develop a coordination system for payment systems in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman.
More so, the intergovernmental political and economic union authorized monetary institutions and central banks to own and manage the project by establishing independent companies owned and funded by financial and central bank institutions in the GCC countries.
The system connects payment systems of GCC countries and other approved entities, transferring and settling payments and executing cross-border payment orders. This includes tools, procedures and policies for making money transfers between participants.
Above all, the agreement aims to enhance the safety and efficiency of GCC joint payment systems and to reduce any potential risks.
The new arrangement also seeks to maintain financial stability in participating GCC countries and serve their interests. Establishing and developing the supervisory powers of the central banks over the payment systems among the GCC countries is another one of the objectives.
This will be achieved by providing a cross-border real-time settlement system for GCC countries and supporting dealing in local currencies.
The shift promotes integration between financial markets, ensures the speed of cash transfers, unifies their format and ensures their protection, and supports bilateral and multilateral relations.
GCC central banks will have powers that cover establishment, ownership and appointment of companies to manage and operate the joint system, develop payment systems, and ensure their operation.
The system stipulates that any dispute arising in connection with this agreement will be settled amicably or through arbitration under agreed rules.