ProdukHukum BankIndonesia SEACEN Advanced KL
BANK INDONESIA
EXPERIENCE OF REFORM AND
MODERNIZATION OF PSS
Dyah N.K. Makhijani
Bank Indonesia
PRESENTED TO
1st SEACEN ADVANCED LEADERSHIP COURSE
ON CENTRAL BANK MANAGEMENT AND POLICY
January 16, 2007
Kuala Lumpur
REFORM AND MODERNIZATION OF PSS
REFORM FACTS (1)
• When ?
Started in 1995
• What ?
(did we start
with)
Developing a National Payment System Blue Print in 1995
(updated in 2004)
• Why ?
(did we start
with a Blue
Print)
•
•
•
•
• Who ?
(were involved
in the
development of
the Blue Print )
• Staff “on-loan” from :
- Research Department
- Legal Dept
- Money Market Dept
- Accounting/Finance Dept
- Forex Dept
- IT Dept
- Banker Regulation Dept - Currency Dept
- International Dept
- Strategic Planning Dept/OE
practices
Understand the coverage of PSS
Provide a road map for longterm development
Prioritization of projects over a long period of time
Help building sufficient mass of staff/ capability to handle future
development
REFORM AND MODERNIZATION OF PSS
REFORM FACTS (2)
• Who ?
(did we invite
to help ?)
• A group of consultants with experience in subsets of PSS
development
• “Advisors” from BIS, WB, IMF, Fed Washington DC, RBA
• Coverage of
study within the
Blue Print
project
•
•
•
•
•
• Coverage of
reform
Payment instruments & method
Banking procedures
Settlement mechanism
Payment infrastructure
Payment service providers (Clearing houses, switch providers,
etc)
• Legal framework
•
Reform Target
Payment instruments
• Settlement mechanism
•
•
Longterm Objective
Shift towards less paper
Shift large value parts to
RTGS keep netting for
lower value
REFORM AND MODERNIZATION OF PSS
REFORM FACTS (3)
• Coverage
of reform
Reform Target
• Bank-Level Cheques
• Risk mitigation in netting
system
•
•
• Payment infrastructure
•
•
• Payment service providers
•
•
• Legal framework
•
Longterm Objective
Shift to credit transfers
Shift large value credit to
RTGS
Put FtS mechanism for the
rest of netted payments
Convergence,
at least
interoparable
Rules/code of
conduct/”oversight” framework
to be placed
Business convergence if
possible
Laws to be in place for BI’s
mandate pertaining to PSS,
funds transfers, exclusion from
ø hour rules, finality of
payments, etc.
REFORM AND MODERNIZATION OF PSS
REFORM FACTS (4)
• Other Issues
• Conforming to the principles of
- Risk reduction
- Efficiency
- Equitable access
- Consumer protection
• Reform time frame
(Defined during
1995 Blue Print
Development)
•
•
•
•
Targetted
Factual
Are we on track ?
Blessing in disguisse
:
:
:
:
10 – 15 years since 1996
10 years already passed
We believe so
1998 crisis
REFORM AND MODERNIZATION OF PSS
LESSONS LEARNED
-TO REFORM-
1. UNDERSTAND THE BIG PICTURE
2. HIGH – LEVEL “BELIEVERS”
3. BUILD ROADMAP, CLEAR PRIORITY, STICK TO IT
4. TRAIN ENOUGH MASS
-----THANK YOU----January 16, 2007
Kuala Lumpur
EXPERIENCE OF REFORM AND
MODERNIZATION OF PSS
Dyah N.K. Makhijani
Bank Indonesia
PRESENTED TO
1st SEACEN ADVANCED LEADERSHIP COURSE
ON CENTRAL BANK MANAGEMENT AND POLICY
January 16, 2007
Kuala Lumpur
REFORM AND MODERNIZATION OF PSS
REFORM FACTS (1)
• When ?
Started in 1995
• What ?
(did we start
with)
Developing a National Payment System Blue Print in 1995
(updated in 2004)
• Why ?
(did we start
with a Blue
Print)
•
•
•
•
• Who ?
(were involved
in the
development of
the Blue Print )
• Staff “on-loan” from :
- Research Department
- Legal Dept
- Money Market Dept
- Accounting/Finance Dept
- Forex Dept
- IT Dept
- Banker Regulation Dept - Currency Dept
- International Dept
- Strategic Planning Dept/OE
practices
Understand the coverage of PSS
Provide a road map for longterm development
Prioritization of projects over a long period of time
Help building sufficient mass of staff/ capability to handle future
development
REFORM AND MODERNIZATION OF PSS
REFORM FACTS (2)
• Who ?
(did we invite
to help ?)
• A group of consultants with experience in subsets of PSS
development
• “Advisors” from BIS, WB, IMF, Fed Washington DC, RBA
• Coverage of
study within the
Blue Print
project
•
•
•
•
•
• Coverage of
reform
Payment instruments & method
Banking procedures
Settlement mechanism
Payment infrastructure
Payment service providers (Clearing houses, switch providers,
etc)
• Legal framework
•
Reform Target
Payment instruments
• Settlement mechanism
•
•
Longterm Objective
Shift towards less paper
Shift large value parts to
RTGS keep netting for
lower value
REFORM AND MODERNIZATION OF PSS
REFORM FACTS (3)
• Coverage
of reform
Reform Target
• Bank-Level Cheques
• Risk mitigation in netting
system
•
•
• Payment infrastructure
•
•
• Payment service providers
•
•
• Legal framework
•
Longterm Objective
Shift to credit transfers
Shift large value credit to
RTGS
Put FtS mechanism for the
rest of netted payments
Convergence,
at least
interoparable
Rules/code of
conduct/”oversight” framework
to be placed
Business convergence if
possible
Laws to be in place for BI’s
mandate pertaining to PSS,
funds transfers, exclusion from
ø hour rules, finality of
payments, etc.
REFORM AND MODERNIZATION OF PSS
REFORM FACTS (4)
• Other Issues
• Conforming to the principles of
- Risk reduction
- Efficiency
- Equitable access
- Consumer protection
• Reform time frame
(Defined during
1995 Blue Print
Development)
•
•
•
•
Targetted
Factual
Are we on track ?
Blessing in disguisse
:
:
:
:
10 – 15 years since 1996
10 years already passed
We believe so
1998 crisis
REFORM AND MODERNIZATION OF PSS
LESSONS LEARNED
-TO REFORM-
1. UNDERSTAND THE BIG PICTURE
2. HIGH – LEVEL “BELIEVERS”
3. BUILD ROADMAP, CLEAR PRIORITY, STICK TO IT
4. TRAIN ENOUGH MASS
-----THANK YOU----January 16, 2007
Kuala Lumpur