Jan 03 2012 |
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DIFC Pushing Ahead With Plans To Create Payments System
Tuesday, Jan 03, 2012
DUBAI (Zawya Dow Jones)-- Dubai International Financial Centre , the emirate's financial free zone, said it is pushing ahead with plans to set up a payments system that would allow banks in the DIFC and the wider Middle East region to quickly settle their transactions in dollars and euros.
Standard Chartered PLC will provide settlement services in euros for the new DIFC platform, known as Real Time Automated Payments in the DIFC, or RAPID. HSBC Holdings PLC is in discussions to provide similar settlement services in U.S. dollars.
The RAPID project, which still needs final approval from the United Arab Emirates central bank to start operations, would offer real-time gross settlement (RTGS) of banks' payment transactions. RTGS systems provide instantaneous debit and credit to the accounts of approved participants when sending and receiving funds, thereby reducing settlement risk.
The DIFC said it hopes its planned facility will be able to exploit the time difference between similar payment systems operating in Hong Kong and London.
Saidi said the DIFC is studying the addition of settlement services in Chinese yuan to its RAPID platform, given the large and growing volume of Middle East trade with China.
"It isn't efficient for us to clear and settle our payments for trade with China in dollars and euros... we should start using the (yuan) for all imports and exports to China," Saidi said.
DIFC's plans to set up a payment system date back to 2008, when it signed an agreement with the U.A.E. central bank to act as lead regulator for the RAPID project. The central bank is responsible for ensuring that RAPID complies with payment system principles issued by the Bank for International Settlements.
-By Leila Hatoum, Dow Jones Newswires; +971-4-446-1686; leila.hatoum@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
03-01-12 0818GMT
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