Banks play a crucial role in trade by proving financial services to businesses, therefore, financial institutions must adopt the commercial bank settlement models to ease the stress businesses go through when it comes to access to finance.
Head of Payment Systems Department at the Bank of Ghana (BoG), Dr Amediku Settor, had entreated commercial banks to take advantage of the Pan African Payment Settlement System (PAPSS).
He explained that banks need to diversify their sources of income and not only focus on revenue generated from corporate and retail banking.
Speaking at the PAPSS Ghana Roadshow conference in Accra on Friday, June 23, 2023, Dr Settor said, “We are calling on all the banks that are not on the board…what you need to do is to write to us at the payment system department. We will review your request and let you go ahead. I don’t want to hear some banks saying that this PAPSS is benefiting bank A B C D, can Bank of Ghana come up with a policy to level the playing field…”
“I encourage all banks to take the necessary steps and be on the platform. It will give you additional income. Don’t rely on only corporate and retail banking that we know traditionally. The world is changing and it will never wait for us,” he stated.
PAPSS, a financial market infrastructure for economic and financial integration of Africa will increase trade volume as the process is simplified and transactions are made instantly.
The introduction of the commercial bank settlement model has no transaction limits and the settlement is handled by banks.
This new settlement model offers commercial banks a window to open and fund their own settlement accounts at Afreximbank.
They can also manage their liquidity according to their banking needs.
Also, under PAPSS, most payments are done in local currency to boost trading activities on the continent.
As of June 2022, the PAPSS network consists of 8 central banks, 28 commercial banks and six switches.
It is expected to expand into the five regions of Africa before the end of 2023.
Source: www.ghanaweb.com