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Payment system transaction

Various researchers have revealed that the banking and financial sector progress is mandatory for economic development in any country. Pakistani banks are trying to promote capital formation, investment in new enterprises, promotion of trade and industry, savings, and development of agriculture.

Presently banking adepts in Pakistan have also calculated that during January to March 2017, the volume and value of large value transactions processed through PRISM (Pakistan Real time Interbank Settlement Mechanism) system were 253,795 and Rs69.8 trillion respectively. These transactions identified a fall of 4.1 percent in volume and a rise of 20.1 percent in value as compared to the previous quarter. During January to March 2017, in the composition of these transactions, the Inter Banks Fund Transfers contributed 74 percent in volume and 58 percent in value; Government Securities trade transactions shared 9 percent in volume and 24 percent in value and the Retails Cheques Clearing Batches 16 percent in volume and 18 percent in value of these transactions. It is also said that during January to March 2017, 110.8 million transactions of value Rs35.2 trillion were processed through Paper based instruments. These transactions identified a fall of 5.2 percent in volume and 0.1 percent in value of transactions. Out of the total Paper based transactions 16.6 were processed by the clearing house i.e. NIFT and settled through PRISM system under multilateral net settlement process. ATM is the preferred eBanking Channel which acquired largest share of pie in the volume of eBanking transactions. ATM transactions shared 63 percent in the volume and 12.6 percent in the value of total eBanking transactions.

INTEREST RATES IN PAKISTAN (%)

Month

SBP Reverse Repo Rate

SBP Repo Rate

SBP Policy (Target) Rate

11-Feb-13

9.50

7.00

24-Jun-13

9.00

6.50

16-Sep-13

9.50

7.00

18-Nov-13

10.00

7.50

17-Nov-14

9.50

7.00

26-Jan-15

8.50

6.00

24-Mar-15

8.00

5.50

25-May-15

7.00

5.00

6.50

14-Sep-15

6.50

4.50

6.00

23-May-16 till date

6.25

4.25

5.75

January to March 2017, ATMs processed 102 million transactions of worth Rs. 1.2 trillion, which explained a growth of 8.2 percent by volume and 10.7 percent by value as against to previous quarter. On average one ATM processed 91 transactions per day with average size of per ATMs transactions Rs. 11,553. Real Time Online Branches (RTOBs) transactions shared the largest share in value of eBanking transactions and is utilized as a preferred channel for Cash deposits, cash withdrawals and fund transfers transactions within same Banks’ online Branches. This channel processed 37.5 million transactions of value Rs.7.8 trillion during the period under review, depicting the growth of 5.6 percent in volume and fall of 0.6 percent in value as against to the last quarter. POS terminals processed 13.9 million transactions of worth Rs. 64.1 billion. Furthermore, the volume and value of POS transactions increased by 4.1 percent and 3 percent respectively as against to the last period. On average each POS processed 3 transactions per day with average size of per transaction Rs. 4,600. During the quarter January to March 2017, 0.3 million transactions of worth Rs. 2.4 billion were processed in eCommerce which identified a growth of 28.1 percent and 18.7 percent in volume and value as against to previous quarter. Internet Banking processed 6.8 million transactions of worth Rs. 255.9 billion which identified a growth of 11.4 percent by volume and 14 percent by value as against to previous quarter. Among the total Internet Banking transactions Utilities Bills Payment has the highest share of 36.4 percent in total volume of transactions, followed by 29.2 percent share of Inter Banks fund transfers and Intra Banks Fund transfer contributed 26.6 percent in total volume of transactions and residuals is contributed by other payments through Internet Banking.

PRISM SYSTEM TRANSACTIONS (Volume in Actual & Value in Billion-PKR)

Transactions Types

Q1FY17

Q2FY17

Q3FY17

Volume

Value

Volume

Value

Volume

Value

Fund Transfer

200,732

17,910.1

234,657

17,950.2

221,700

19,850.5

Interbank Funds Transfer

76,318

13,965.4

81,411

12,689.0

56,868

15,109.1

Customers Transfers

124,414

3,944.7

153,246

5,261.1

164,832

4,741.4

Securities Transactions

15,972

45,167.1

14,535

36,839.1

16,485

46,747.6

Retails Cheques Clearing

14,010

3,130.2

15,437

3,308.5

15,610

3,182.3

Total

230,714

66,207.4

264,629

58,097.8

253,795

69,780.4

CONCLUSION

In last, I would like to mention here, over the eras various developed economies with sophisticated markets and long functioning banking systems have faced significant banking crises or banking failures. The role of reserve banks is critical in not only preventing and pre-empting failures but acting to resolve matters should the bank fail. On the macro level we know that the banking failures can consequence in cyclical recessions and could also trigger a financial crisis. Securing depositors’ interest ensures that bank’s failure does not lead to ‘domino effect’ resulting in systemic failure; ‘run’ on financial institutions can have horrendous results for their country’s economies. No doubt, Pakistani banks are also offering many non financial services by Internet Banking counting Cheques Books requests, Balance enquiry to Fund transfers and many more.

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