Here are details of GCC agreement on unified payment system

Flags of the Gulf Cooperation Council countries

The Saudi Cabinet approved the Gulf Cooperation Council (GCC) agreement with regard to setting up a unified payment system.

The agreement aims to set up a unified payment system for implementing the transfer and settlement of payments between the GCC countries, as well as enhance the safety and efficiency of the joint payment systems to reduce any potential risks, the official gazette Umm Al-Qura reported.

Accordingly, it leads to maintaining the financial stability in the GCC countries, the report noted.

In addition, the agreement aims to establish and develop the supervisory powers of central banks regarding the payment systems, as well as establish and maintain a regional infrastructure to be the pillar upon which the unified payment systems are based in the GCC countries.

Under the agreement, the central banks that may be affected by any action violating the provisions of this agreement have the right to find alternative solutions to ensure the settlement of transactions.

The participation of the GCC countries in the system is optional, based on their readiness. However, this has nothing to do with their contribution to the establishment of any GCC payment company.

The central banks will have the authority to establish, own and hire companies to manage and operate the system, in accordance with the controls approved by the Committee of Governors, in addition to developing the payment systems, and ensuring that the transfer and settlement of executed transactions are carried out as per the approved terms and conditions.

The central banks will also approve the exchange rates of the GCC currencies and other currencies for the transactions related to the system.

They will also manage liquidity and financial guarantees to ensure the continuity of the system, as well as set up the necessary mechanisms that would provide appropriate protection for the settlement of cross-border transactions, including the establishment of a fund to guarantee these settlements.

According to the agreement, all payments, settlements, and clearances carried out through the system are valid, final, and irrevocable. Moreover, the clearance arrangements are valid, binding, enforceable and excluded from the provisions of the bankruptcy laws in the GCC countries.