8th SAARCFINANCE Co-ordinators’ Meeting – Proceedings
The 8th SAARCFINANCE Co-ordinators’ Meeting was inaugurated by Dr. G. S. Bhati, Principal Adviser, Department of Economic Analysis and Policy (DEAP) on September 10, 2007 in RBI, Mumbai. SAARCFINANCE Co-ordinators from five SAARC central banks excepting those from Afghanistan, Pakistan and Bhutan, and an observer from the Ministry of External affairs, Government of India attended the meeting. An interface of the SAARCFINANCE Co-ordinators with CGM/HoDs of the select operational Departments of the Reserve Bank of India was also arranged to discuss some technical issues relating to Indian context. The annotated agenda and the list of participants are given, respectively, in Annex I and Annex II.
In his inaugural address, Dr. G. S. Bhati, Principal Adviser welcomed the delegates of SAARC member countries as well as the observer from the Ministry of External Affairs, Government of India. The Principal Adviser in his opening remarks gave a brief background, framework and objectives of the SAARCFINANCE. He apprised the august house that the Co-ordinators from Pakistan, Afghanistan and Bhutan could not attend the meeting due to some unforeseen circumstances at their end. He recalled the decision of the 13th SAARCFINANCE Group Meeting that the Co-ordinators’ meeting should be held twice a year before the IMF/World Bank Annual and Spring Meetings. Accordingly, RBI hosted the 8th SAARCFINANCE Co-ordinators’ Meeting during September 10-11, 2007 as the IMFC meeting is scheduled to be held in Washington during October 20-22, 2007. He also highlighted that in order to have a fruitful discussion on the technical issues, the select CGM/HoDs of the RBI were also invited to this meeting for an interface session. He then requested to Dr. R.K.Pattnaik, Adviser, DEAP, who is also the Central Co-ordinator, SAARCFINANCE, to proceed with the agenda.
The proceedings of the 7th SAARCFINANCE Co-ordinators’ Meeting held in Dhaka on March 15, 2007 were put to the house for members’ confirmation, which were unanimously accepted.
In order to have country-wise review of the progress on SAARCFINANCE activities, a country-wise report prepared by RBI was placed in the house. Members provided certain updates, wherever required, concerning their country’s SAARCFINANCE activities. The revised country-wise activity report after incorporating members’ updation was subsequently circulated in the meeting.
The review of the progress on SAARCFINANCE planned seminars, symposia and studies was undertaken. Sri Lankan delegate informed that the Governors’ symposium on ‘South Asia’s Recent Growth and Future Prospects’ would be held in February 2008 at the Central Bank of Sri Lanka. Bangladesh Co-ordinator apprised that a seminar on ‘Corporate Governance in Banks and Financial Institutions in SAARC Countries’ would be held during the first quarter of 2008 but specific date has not yet been fixed. Regarding the proposal of holding of seminar on ‘Implementation of Basel II’ by the Maldives Monetary Authority, the Maldives’ Co-ordinator informed that it was not feasible for them to hold it till 2008.
Albeit, the Co-ordinator/Representative from Pakistan could not attend the meeting, however, the State Bank of Pakistan intends to hold a seminar on ‘Significance of Central Bank Independence in a Developing Country’ sometime during the second quarter of 2008.
It was decided by the Co-ordinators that the Secretariat would request member countries to forward concrete proposals for studies, seminars, symposia, training, etc. Regarding research studies (projects), it was decided that such studies should be finalized in the SAARCFINANCE Governors’ meeting taking into account various aspects such as technical expertise, usefulness, etc.
An interface of the SAARCFINANCE Co-ordinators with select Heads of the Departments of the Reserve Bank of India [viz., Monetary Policy Department (MPD), Financial Markets Department (FMD), Department of Payment and Settlements System (DPSS) and Department of Banking Operations and Development (DBOD)] was arranged to discuss some of the technical issues relating to Indian context. In this session, Mr. A.P.Hota, CGM, DPSS discussed in brief some of the recent developments on India’s both wholesale and retail payment and settlement system. He also mentioned that the Central Bank of Sri Lanka had proposed for setting up of a regional payment cell and circulated a questionnaire in this regard. The Reserve Bank of India would examine the issue and communicate its stance to Sri Lanka in due course. Mr. P.R.Ravi Mohan, GM, DBOD briefly touched upon various steps that had been taken by RBI for implementing the Basel II norms in India. Mr. Chandan Sinha, CGM, FMD explained the major initiatives taken by the Reserve Bank of India towards development of various segments of the financial market (viz., money market, government securities market, corporate bond market and foreign exchange market). Dr. M.D. Patra, Adviser-in-Charge, Monetary Policy Department, discussed some of the major monetary policy issues being faced by India at current juncture.
(a) Enhancing Staff Exchange Programme
The Co-ordinator from Nepal underscored the need for more active participation of SAARC member countries in various programmers under the umbrella of SAARCFINANCE.
(b) Review of the status of creation of SAARCFINANCE web folder on central bank’s website and standardization of web folder of SAARCFINANCE in accordance with the IMF’s General Data Dissemination System (GDDS)
The Co-ordinator from Maldives desired to have a common SAARCFINANCE web folder on the line of G-20 where all information relating to a member country should be available through hyper link with the respective central bank’s website. As of now, six member countries have their own SAARCFINANCE web folders linked to their respective central bank’s website. It was agreed by the members to revisit this issue and give feedback to the Secretariat.
(c) Electronic publication/book form of time-series data on major economic variables
Making available major macro-economic data for all the eight SAARC member countries in one place was also discussed in the meeting. Members observed that the co-ordination relating to data updation may be done on a rotational basis and whichever country holds the Chair may take up this responsibility. Some of the Co-ordinators were of the views that an independent SAARC website may be set-up where the economic data would be posted. However, it was agreed that this proposal needs thorough examination. It was decided that to begin with, country-wise major economic data may be published in e-Newsletter. In the next step, these data may be posted on the website (in the SAARC folder) of the country holding the SAARC Chair. In the third stage, posting the economic data on an independent website (i.e., SAARC) could be considered. It was agreed that Nepal should take a lead, having proposed this item in the agenda. Accordingly, Nepal was requested to develop a model for data structure and submit the model to the SAARCFINANCE Secretariat which in turn would circulate it among all other members for their concurrence/confirmation. It was emphasized that the technical feasibility needs to be ascertained in this regard. The benchmark year for selecting data for any economic variables has, however, been suggested for 2000-2001 (2000 for calendar year).
(d) Improvement in the contents of the SAARCFINANCE e-Newsletter
Regarding improvement in the content of the e-Newsletter, it was suggested to provide 1-2 pages information on major macro-economic policy announcement (say, monetary policy, banking, exchange rate, trade, etc.) adopted by the member countries. In this regard also, Nepal was requested to prepare a model for broad macro-economic policy structure which may be circulated among all other members for their concurrence before placing it in the SAARCFINANCE Group meeting.
There were mainly two issues for discussion in the technical session. Major points discussed under each of these issues are given below -
(a) Framework on Regional Co-operation on Payments and Settlement System
The SAARCFINANCE conference on ‘Towards a Regional Payment Group’ was held on July 6, 2007 at the Central Bank of Sri Lanka. The proceedings of the above-mentioned conference were circulated in the meeting. The following action points were decided in the meeting :
- Papers presented in the seminar would be circulated among all Co-ordinators
- Sri Lanka will prepare a brief proposal on the issue which would be circulated among all other Co-ordinators through the Secretariat.
(b) Formation of the South Asia Credit Bureau Associations for SAARC Region
This proposal had come from Sri Lanka. The following action points were proposed in this regard :
- Sri Lanka will prepare a brief proposal which would be circulated among all other Co-ordinators through the Secretariat
- This issue may be taken up as an agenda item for discussion in the SAARCFINANCE Group meeting.
The Co-ordinators were requested to send their suggestions for the preparation of potential agenda items for the forthcoming SAARCFINANCE Group meeting scheduled to be held sometime during October 20-22, 2007 at Washington DC, USA. In this regard, the Secretariat will seek the convenient date and timing of the SAARCFINANCE Group meeting in October 2007.
At the end, Dr. R.K.Pattnaik, Adviser, thanked the delegates for their active interest and participation in the proceedings. The Chairman also thanked the observer from the Ministry of External Affairs, Government of India for making it convenient to attend the meeting. Delegates appreciated RBI for its hospitality and excellent logistic support.
The meeting ended with a vote of thanks from the Chair.
Annex I
8th SAARCFINANCE Co-ordinators’ Meeting
September 10-11, 2007, Mumbai, India
Annotated Agenda
- Before starting main discussion of the meeting, Co-ordinators or delegates of the meeting may confirm the proceedings of the 7th SAARCFINANCE Co-ordinators' meeting held on March 15, 2007 in Dhaka, Bangladesh.
- Country-wise activities of SAARCFINANCE since January 2007 may be highlighted. Each member country may discuss about SAARCFINANCE activities that have taken place in its country since January 2007.
The delegates of the 15th SAARCFINANCE Group Meeting (May 15, 2007, Dhaka) agreed to organize a SAARCFINANCE Governors’ symposium and decided that the Governor of the Central Bank of Sri Lanka, Mr. Ajith Nivard Cabraal will take initiative for preparing a status paper on this issue and other members may also contribute to it. After getting the inputs and comments from the central banks, the paper will be finalized for presentation in the proposed Symposium. The date and venue may be decided by the Governor of the Central Bank of Sri Lanka. The symposium is proposed to be held in February 2008 at International Conference Hall, Central Bank of Sri Lanka, Head Office Building. |
South Asia’s Recent Growth and Future Prospects |
Bangladesh Bank intended to organize a seminar in the first quarter of 2008 |
Corporate Governance in Banks and Financial Institutions in SAARC Countries |
Maldives Monetary Authority plans to host a seminar on in 2007 |
Implementation of Basel II |
State Bank of Pakistan intends to hold a seminar sometime during the second quarter of 2008 |
Significance of Central Bank Independence in a Developing Country |
- Specific timing of holding the above-mentioned seminars/symposia may be ascertained by the concerned member countries and
- Remaining member countries may also propose to organize, if any, other seminars/symposia/workshop/etc during the current year (2007).
Trainings/Seminars/Symposia/Workshops:
- Member countries may propose for new trainings/seminars/symposia/workshops to be organized by them during 2008.
- Tentative timing, if possible, of holding these trainings/seminars/symposia/workshops may be indicated by the concerned member countries.
Suggested Studies (Research Projects):
Bangladesh Bank |
A comparative study on the monetary and exchange rate policies in the SAARC countries. |
Central Bank of Sri Lanka |
1. The changing financial environment and implications for central banks.
2. Increasing economic and financial resiliency through effective domestic demand management.
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- The studies (research projects) may comprise the representatives from all member countries. The studies after their completion may be considered for publication.
- The topics for the studies (research projects) may be finalized in the Co-ordinators’ meeting.
- Member countries may propose for new studies (research projects) to be undertaken under SAARCFINANCE network during 2008.
- Tentative timing, if possible, of completing these studies (research projects) may be indicated by the member countries.
(a) Enhancing Staff Exchange Programme
- Identification of potential area for training
- Initiatives towards enhancing the number of training programmes and also increasing their effectiveness
- Strengthening of database regarding staff exchange
- Potential problems and their solutions may be discussed
(b). Review of the status of creation of SAARCFINANCE web folder on central bank’s website and standardization of web folder of SAARCFINANCE in accordance with the IMF’s General Data Dissemination System (GDDS).
- As per the decision of the 4th SAARCFINANCE Co-ordinators’ Meeting, six central banks (viz., State Bank of Pakistan, Central Bank of Sri Lanka, Bangladesh Bank, Nepal Rastra Bank, Royal Monetary Authority of Bhutan and Reserve Bank of India) have already created SAARCFINANCE web folder at their respective central bank’s website.
- Progress of the remaining member countries with regard to creation of SAARCFINANCE web folder on central bank’s website may be reviewed and also progress in respect of standardization of contents of SAARCFINANCE web folders for maintaining uniformity may be reviewed.
(Remaining organizational issues would continue in post-lunch session)
- There will be an interface session with CGM/HoDs of the concerned Departments of the RBI (viz., MPD, DPSS, DBOD and FMD) on the technical issues relating to Indian context.
(a) Framework on Regional Co-operation on Payment and Settlement System
- The importance of payment systems as a critical facilitator in cross border flows as well as domestic transactions is not to be undermined. SAARCFINANCE member central banks may decide to establish a regional payment initiative to reap the full benefits of expanding trade and investment flows. However, it may be realized that several risks may arise in cross border payments. Also, technological capabilities of the member countries should be assessed in moving towards a regional payment initiative.
The SAARCFINANCE conference on ‘Towards a Regional Payment Group’ was held on July 6 2007 at the Central bank of Sri Lanka. In this conference all delegates who represented the SAARCFINANCE central banks agreed in principle to the creation of a regional payments initiative. Further, it has been recorded in its proceedings that SAARCFINANCE Governors could ratify the recommendation to establish the regional payment initiative at the next SAARCFINANCE Governor's meeting to be held after the IMF/WB annual meeting in Washington in October 2007. It was also decided that each central bank representative attended the above-mentioned conference will report the deliberations to their Governors as this would be one of the agenda items in the next SAARCFINANCE Group meeting. The name of such regional payments group was accepted as ‘SAARC Payments Council’ for recommending to the SAARCFINANCE Governors’ meeting.
(b) Formation of the South Asia Credit Bureau Association for SAARC Region
- Every country in South Asia region has either established or taken steps to set up a credit information bureau. Given the commonalities in the region, the need to form an Association for the region was also emphasized at the South Asia Credit Bureau Summit held in Colombo in May 2004 and in Chennai in February 2007. The rapid developments in the industry posing more challenges for the existing bureaus at the country level and in a bid to face these growing challenges in terms of technology, law & practices, expanding services, etc., it seems to be plausible to set up ‘South Asia Credit Bureau Association for SAARC Region’. Such an Association may facilitate the individual bureau to share experiences with one other, to share cross border information, developing a common scoring model and other value added services, etc.
In this regard, the Central Bank of Sri Lanka and Royal Monetary Authority of Bhutan have received request from their respective Credit Information Bureau for setting up of such an Association in the region.
(c) Electronic publication/book form of time-series data on major economic variables
- Discussion may take place on the viability of compiling time-series data on major economic variables for the SAARC member countries and also publishing them either in an electronic-form or book-form. Other related issues, if this proposition found viable, could be discussed such as-
- Who should compile and develop the yearly time series data of major macro-economic variables for the SAARC member countries?
- What should be the major macro-economic variables for an economy?
- What should be the mode of reporting the time series data to the nodal central bank?
- What should be mode of sharing information?
- Which year should be the benchmark for macro-economic variables?
- Should the consolidated data also be published in book form?
(d) Improvement in the contents of the SAARCFINANCE e-Newsletter
- The second issue of the SAARCFINANCE e-Newsletter, covering activities that have taken place during January-June 2007, was published by the Reserve Bank of India (RBI) in July 2007. The first issue of this e-Newsletter was published by the Bangladesh Bank in December 2006.
- Discussion could take place on the issue of improving the contents of SAARCFINANCE e-Newsletter. Should this e-Newsletter also include major economic and financial policies adopted by the SAARC member countries?
- Co-ordinators or delegates would make suggestions regarding potential agenda items for the ensuing SAARCFINANCE Group meeting to be held after the IMF/WB (IMFC) annual meeting in Washington in October 2007. IMFC meeting is scheduled to be held during October 20-22, 2007 at Washington D.C, USA.
- The tentative date for SAARCFINANCE Group meeting has been proposed on October 21, 2007 (Sunday) at 7.30 AM in Washington. The confirmation from the member countries (except Da Afghanistan Bank) in this regard is still awaited.
Annex II
8th SAARCFINANCE Co-ordinators’ Meeting
September 10-11, 2007, Mumbai, India
| 1. Mr. Habibullah Bahar |
Economic Adviser, Bangladesh Bank & SAARCFINANCE
Co-ordinator, Bangladesh |
| 2. Dr. R.K.Pattnaik |
Adviser, Department of Economic Analysis and
Policy, Reserve Bank of India & SAARCFINANCE
Co-ordinator, India |
| 3. Ms. Azeema Adam |
Deputy Managing Director, Maldives Monetary Authority &
SAARCFINANCE Co-ordinator, Maldives |
| 4. Ms. Shiba Devi Kafle |
Director, Research Department, Nepal Rastra Bank & SAARCFINANCE Co-ordinator, Nepal |
| 5. Mr. K.M.Abeykoon |
Deputy Director, Training Department, Central Bank of Sri Lanka & SAARCFINANCE Co-ordinator, Sri Lanka |
| Ms. Apoorva Srivastava |
Under Secretary, Ministry of External affairs, Government of India |
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| 1. Dr. M.D.Patra |
Adviser-in-Charge, Department of Monetary Policy, Reserve Bank of India |
| 2. Shri A.P.Hota |
Chief General Manager, Department of Payment and Settlement Systems, Reserve Bank of India |
| 3. Shri Chandan Sinha |
Chief General Manager, Financial Markets Department, Reserve Bank of India |
| 4. Shri P.R. Ravi Mohan |
General Manager, Department of Banking Operationsand Development, Reserve Bank of India |
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