KARACHI: Paper-based banking still dominates transactions despite rapid growth in e-banking, said a State Bank of Pakistan (SBP) report issued on Wednesday.

“The industry is working on the implementation of digital image-based cheque processing whereby clearing process is expected to become more efficient reducing the physical transmission of cheques in the clearing process,” said the report, titled ‘Payment System Review’.

Rules are also being developed for clearing house and risk management framework in settlement systems, it said.

The central bank is also working to provide guidelines to the industry on the security of online banking and payment cards and, to strengthen its regulatory oversight, it is developing designation framework of payment systems and framework for oversight.

According to the report, the volume of paper-based transactions nominally decreased by 0.12 per cent to 361 million in FY15 from 362m in the preceding year. The value of these transactions was Rs127 trillion in FY15, a rise of 10pc compared to Rs115.16tr in FY 14.

Paper-based transactions constitute around 34pc of total retail payments. During the fourth quarter (April-June) of 2014-15, nearly 92.5m transactions (Rs34.6tr) were executed using paper instruments, a quarter-on-quarter increase of 8pc in volume and 18pc in value.

Over the past five years, e-banking transactions have grown phenomenally: their volume increased by 100pc to 470m from 235m and value by 62pc to Rs35.8tr from Rs22.1tr. The previous fiscal year alone witnessed a growth rate of 16pc in volume and 6pc in value.

During FY15, the volume of ATM transactions reached 300m amounting to Rs3.2tr in value, a growth rate of 16pc and 21pc, respectively, over FY14. Of these, 288.89m (Rs2.66tr) were cash withdrawals, which means they contributed around 96pc to the volume and 83pc to the value of ATM transactions.

Moreover, ATM transactions were 11pc of the total retail electronic payments during FY15.

Utility bill payments also increased both in volume and value, rising by 39pc to 869,000 and by 79pc to Rs2.934bn, respectively.

Published in Dawn, September 3rd, 2015

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