KARACHI, Jan 12: The State Bank has drafted a Payment Systems and Electronic Fund Transfers Act, 2005 aimed at providing stability in the financial system of the country through an efficient and well functioning payments system.

"Such a system will not only reduce the systemic and operational risks, but will also lower the transaction costs and help in the efficient use of financial resources," said a press release issued by the central bank.

The proposed act covers the operation of payment systems, including clearing and settlement obligations of the parties involved, supervisory role of the SBP in this regard, documentation requirements by the participants, liabilities of parties in payment systems, and any legal proceedings in case of any conflict.

The act also covers the real time gross settlement (RTGS) system, currently under implementation at the central bank. A draft copy of the act has been placed at the SBP website (www.sbp.org.pk).

The State Bank has invited feedback/suggestions/comments/recommendations on the act from banks and other stakeholders. It has asked all the stakeholders to give their comments at the email address: feedback.lsd@sbp.org.pk latest by March 11, 2005.