Brief History, Objectives and Activities
The 10th SAARC Summit of the Head of the States of the SAARC Region which was held in Colombo on July 29, 1998 agreed, in principle, to establish a "Network of Central Bank Governors and Finance Secretaries of the SAARC Region (SAARCFINANCE)" with a view to opening dialogues on macroeconomic policies of the region and sharing mutual experiences and ideas. Accordingly, the SAARCFINANCE was established on September 9, 1998 as a regional network of the SAARC Central Bank Governors and Finance Secretaries. It is a permanent body, which got formal recognition of SAARC at the 11th SAARC Summit, held in Kathmandu, Nepal in January 2002. As per the decision of the Summit, Chairperson of SAARCFINANCE is invited to the sessions of the SAARC Council of Ministers to make a presentation on SAARCFINANCE activities.
The basic objective of establishing the SAARCFINANCE Network is to share experiences on macroeconomic policy issues among member countries of the region. However, the broad objectives of the SAARCFINANCE Network are as follows:
- To promote cooperation among central banks and finance ministries in SAARC member countries through staff visits and regular exchange of information.
- To consider and propose harmonization of banking legislations and practices within the region.
- To work towards a more efficient payment system mechanism within the SAARC region and strive for higher monetary and exchange cooperation.
- To forge closer cooperation on macroeconomic policies of SAARC member states and to share experiences and ideas.
- To study global financial developments and their impact on the region including discussions relating to emerging issues in the financial architecture, IMF and World Bank and other international lending agencies.
- To monitor reforms of the international financial and monetary system and to evolve a consensus among SAARC countries in respect of the reforms.
- To evolve whenever feasible joint strategies, plan and common approaches in international fora for mutual benefit particularly in the context of liberalization of financial services.
- To undertake training of staff of the ministries of finance, central banks and other financial institutions of the SAARC member
countries in subjects relating to economics and finance.
- To explore networking of the training institutions within the SAARC region specializing in various aspects of monetary policy, exchange rate reforms, bank supervision and capital market issues.
- To promote research on economic and financial issues for the mutual benefit of SAARC member countries.
- To consider any other matter on the direction/request of the SAARCFINANCE, Council of Ministers or other SAARC bodies.
The 9th SAARCFINANCE meeting decided that since the current workload is not sufficient for establishing a permanent formal SAARCFINANCE Secretariat, the existing arrangement of having secretariat of the network on a rotation basis with the central bank of the country that holds chairmanship of SAARC, to be continued. The SAARCFINANCE Chair also moves in rotation with the change of the SAARC Chair. The Chair of the SAARCFINANCE moved to the Reserve Bank of India (RBI) from Bangladesh Bank during the Asian Clearing Union (ACU) Meeting held in Dhaka on May 15, 2007.
Each central bank established a SAARCFINANCE cell to coordinate the activities of SAARCFINANCE. Member central banks also appoint a Coordinator. The Coordinator of the central bank of SAARC Chairperson's country acts as the central Coordinator.
SAARCFINANCE Group Meetings
The SAARCFINANCE Group meets twice a year concurrently with the IMF/WB annual and spring meetings.
SAARCFINANCE Coordinators' Meetings
To facilitate the working of the SAARCFINANCE network, it was decided at the 13th SAARCFINANCE Group meeting that Coordinators should meet twice a year and 2-3 delegates could represent each country.
Sharing information among the SAARCFINANCE institutions progressed satisfactorily. A good number of publications and other documents on various policy issues were exchanged among the member country's institutions.
Involvement of Financial Institutions
In the case of the involvement of the financial institutions, as per the decision of the 9th SAARCFINANCE meeting, the institutions that are under the regulatory purview of the central banks could be invited to participate in the SAARCFINANCE activities like research, training, seminars, etc., if such activities would be useful for them. In the aforesaid meeting it was also decided that the multilateral institutions like the World Bank, IMF, ADB, BIS, etc., could be involved for technical matters in the training and seminar programs but the leadership should lie with the SAARCFINANCE itself.
As per the decision of the 14th SAARCFINANCE Group Meeting held in Singapore on September 20, 2006, the Bangladesh Bank has already launched the first issue of half-yearly (December 2006) SAARCFINANCE e-Newsletter in January 2007. It is a regular electronic publication designed mainly to present news items mostly related to SAARCFINANCE activities. The current issue of e-Newsletter, covering activities that took place during January-June 2007, was published by the Reserve Bank of India (i.e., present SAARCFINANCE Chair) in July 2007.
Staff Exchange Programme
Since the inception of the SAARCFINANCE a good number of officers visited various institutions of member countries under Staff Exchange Programme. The matters of the Staff Exchange covered a broad range of issues ranging from risk-based supervision to human resource management and forward marketing arrangements for agricultural product, etc. Considering the effectiveness of the staff exchange programme and also in the case of training, seminars, etc., the matter of cost sharing is left entirely to the country concerned.
A number of seminars/workshops/special studies have been conducted on common topical issues by some of the member countries of the SAARC region. It was decided at the 13th SAARCFINANCE Group meeting that every member central bank (except Bhutan and Maldives) would organise at least one seminar every year.
SAARCFINANCE Link on Central Bank's Website
As per the decision of 4th SAARCFINANCE Coordinators' Meeting, State Bank of Pakistan, Central Bank of Sri Lanka, Bangladesh Bank, Royal Monetary Authority of Bhutan and Nepal Rastra Bank have created a link of SAARCFINANCE on their websites. Other SAARC central banks are also expected to create such link soon.