Accra, Nov 27, GNA - A new Payment Systems Bill to give legal backing to the ownership, operation and supervision of payment and settlement systems by the Bank of Ghana (BOG), has been drafted for passage.

Dr Kwabena Duffour, Governor of the Bank, who announced this said BOG has also revised the Bills of Exchange Act under a new name, the Bills and Cheques Bill. "The new Bill now reflects modern trends in trade and commercial practices. "It also allows for electronic transfers of funds, cheque truncation and the storage of information in electronic forms," he said.

The two Bills, he explained, are necessary to fashion out a new payment system in the country.

He was delivering the annual Governor's Address to members and fellows of the Chartered Institute of Bankers (CIB) at the Annual Dinner Dance to climax the CIB Week on the theme: "Effective Financial System, An Engine For Strong Economic Growth."

Although the Payments Committee has made a lot of progress, more should be done to promote non-cash payment systems, Dr Duffour said adding "the enforcement of criminal laws would to a large extent determine whether customers use cheques and other non-cash modes of payment."

The governor said a review of other laws to advance payment systems and instruments would be necessary to complement the laws drafted by the Central Bank.

Dr Duffour said the BOG views wholesale payments systems, as its responsibilities while retail payment is the domain of the commercial banks. He pledged BOG's commitment to support commercial banks in developing systems individually or in co-operation with one another.

Dr Duffour urged them to co-operate in developing common infrastructure and then compete in the packaging and presentation of products and services. The BOG would implement an Inter-bank High Value Payment System based on the Real Time Gross Settlement Principles, which would allow all retail payment systems' net clearing results to be settled through it over the books to the Central Bank, next year.

"This will form the nerve centre of Ghana's domestic payment system," Dr Duffour said.

Other projects envisaged are: a paper clearing system to complement the clearing system, automation of cheque clearing in Kumasi and Takoradi and a payment instrument printer accreditation scheme to ensure that instrument standards remain high.

Dr Duffour said in line with BOG's policy, banks would be encouraged to develop retail paper and electronic payment systems. "It is in line with this policy stance that three banks have been allowed to operate various store-value cards while two others have been given the go ahead to introduce other electronic money products" he said.

The Governor said the BOG will "continue to monitor and review the payment developments to ensure that systemic and other payments related risks remain within reasonable limits."

Dr Duffour said current technological advancement has changed the face of banking, with most of them changing from product sellers to solution providers, adding that the banks must equip themselves with requisite and professional technological skills to face the challenges of a global banking system.

He said in spite of economic difficulties in the first half of the year, the banking industry performed creditably.

Total assets grew by about 37 per cent while total deposits rose by 41 per cent during the period. "Gross advances granted by the industry increased by about 30 per cent, with the manufacturing sector absorbing more than 25 per cent," he said.

He commended the keen and healthy competition among the banks, especially in product development, saying it was in the right direction and must be pursued further.

Dr Duffour called for the assessment of the products to ascertain their contribution towards the performance of banking in the country.

"In fact, we need products that would move the economy from cash-based to the use of debit and credit cards, as well as those that would encourage mobilisation of savings."

He told the banks to learn from the liquidation of the Bank for Housing, the Co-operative Bank and Bank for Credit and Commerce International (BCCI) to guard against imprudent banking practices by adhering strictly to legal ceilings and BOG's Guidelines on dealing with intra-group and counter-parties.

Dr Duffour urged banks to institute effective control measures to avert fraudulent practices, minimise waste and prevent assumption of undue credit risk.

Mr Alex Ashiabor, former Governor of the BOG and Mr Frederick Addo, formerly of the BOG, were admitted as Fellows of the Institute at the ceremony. Twenty students who successfully completed their Associate Examinations were also honoured.

The Bank of Ghana Prize for the overall best student went to Mr Carl Abruquah of the Ghana Commercial Bank.