1. Saudi Arabian Monetary Agency “SAMA”
World Bank
Payment System Conference
May 29, 2007
A Uniform Payments System for the GCC Single Currency The Gulf Integration Project
Ali Alhomidan
Saudi Arabian Monetary Agency “SAMA”

2. Agenda Overview Achievements Payment Systems Committee Objectives
Issues under discussion
System options
Issues

3. Overview
Cooperation Council for the Arab States of the Gulf was established in May (
Member states: Bahrain, Emirates, Kuwait, Oman, Qatar, Saudi Arabia
Common social, economic and cultural background
Advanced payment system infrastructure
Active region with largest economy in the Middle East
Local and international bank presence (retail & corporate)
Funds transfers and large financial business exchange between GCC countries

4. Achievements in Payments System integration
Standard RTGS format
GCC Net (ATMs / POS) Connection (one standard)
Operating rules and regulations
Banking Supervision
GCC website
On going cooperation with Monetary Union Committee
Connection between RTGS systems is planned

5. GCC Payments System Committee
Payments System Committee (PSC)
Series of meetings and Workshops (1999–Present)
Research & Proposals
Task Forces
Payments system
Single currency payment system
ATM & Smart Card
Gulf networks connection
The committees report directly to GCC-CB Governors

6. Strategic Objectives
Identify a common payments system infrastructure appropriate to the needs of the GCC common currency
An operational RTGS payment system between all GCC countries by 2010.
Cross border payments between all financial sector participants via central banks
Liquidity transfers in common currency
Settlement of securities transactions
Money market transactions
GCC – ATM, POS and Credit Card settlements

7. Business Objectives
Safe & reliable mechanism for settlement of common currency payments on RTGS basis
Increase efficiency of cross-border payments within the GCC area
Capable of processing both Interbank & Customer payments
Support common currency monetary policy
Compatible with national payments systems of member states
Appropriate for the business needs of the region
Capable of further development in line with growth in use and needs of the common currency

8. PSC – issues under discussion
Proposing GCC - RTGS connection options (the strategy)
The current RTGS system
Continues effort to collect the user requirements
Risk & Change Management
Collateral Policy
Business Cycle and GCC - RTGS harmonization
Development methodology / Project management
Consultancy assistance
The serious involvement from all stakeholders

9. International Cooperation
Bank of International Settlement (BIS)
World Bank (WB)
International Monetary Fund (IMF)
European Central Bank (ECB)
Arab Monetary Fund (AMF)
Other education and learning activities
Workshops & Seminars
Conferences, and awareness campaigns
Shared visits to each country in GCC region

10. GCC RTGS Options Fully integrated system
Single system for all payments in the GCC
Semi-centralized GCC RTGS system
Central system with National systems linked to centre
Fully distributed system
National systems inter-linked multilaterally with no central system

11. Connection Strategy “under discussion”
1. Fully Integrated System
2. Semi-Centralized System
3. Fully Distributed System

12. Fully Integrated – Option 1
UAE
Saudi
Arabia
Kuwait
Single GCC
RTGS System
Qatar
Bahrain
Oman

13. Semi-Centralized – Option 2
UAE
Kuwait
Saudi
Arabia
RTGS
RTGS
RTGS
Integrated GCC
RTGS System
Qatar
RTGS
RTGS
Bahrain
RTGS
Oman

14. Fully Distributed – Option 3
UAE
Kuwait
Saudi
Arabia
RTGS
RTGS
RTGS
Qatar
RTGS
RTGS
Bahrain
RTGS
Oman

15. Issues Collecting the detailed GCC payment system requirements
Commitment of resources
Stake holders...(convincing)
Single currency group movements (parallel movements)
Frequency of meetings and time allocated
Time constraint to achieve the “go live”

16. Thank You a_homidan@sama-ksa.org