The Palestine Monetary Authority (PMA) has gone live on a new technological infrastructure for interbank payments created by the SIA-SSB Group through its Perago subsidiary. In the first four-month period, the system processed the totality of transactions, with an overall counter value of US$14.4bn, equivalent to 216% of Palestine’s gross domestic product (GDP).
Thanks to its multi-currency function, this is the first platform at global level able to manage simultaneously the four different currencies legally recognised in Palestine: the euro, US dollar, Israeli shekel and Jordanian dinar. At present, there are 20 banks (10 of which are foreign) operating in the Palestinian territories through a network of over 210 branches.
Additionally, the system architecture already includes all the functions for the processing of the domestic currency, even though they have not yet been enabled in the system awaiting the establishment of a sovereign independent state of Palestine when PMA becomes a fully-fledged central bank.
Through the real-time gross settlement (RTGS) system with integrated retail payments clearing functions, this is the first implementation of a market solution capable of processing the settlement of both gross interbank payments and retail payments – a solution envisaged by the World Bank’s Payments Systems Development Group and piloted by Perago in Palestine.
The integration of these two requirements complies with the recent guidelines issued by the World Bank, aimed at promoting the development of a single platform for the clearing and settlement of interbank payments within national economies characterised by limited exchange volumes (automated transfer system (ATS)).
“The creation of the new interbank payments system is part of the PMA’s plan to transform itself into a fully-fledged central bank and is one of the key pillars in developing the transmission mechanisms in the Palestinian economy,” said Jihad Alwazir, the governor of the PMA. “Having a secure and modern financial infrastructure will enable the efficient clearing and settlement of payments within the banking system in Palestine, and will encourage the further development of the financial services industry to the benefit of the Palestinian economy.”
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