On an initiative taken by Commercial Banks and with the approval of the Central Bank, a Common Payment Switch will be introduced during the 2nd quarter of 2009.

The CPS will handle retail electronic fund transfers between Commercial Banks in Sri Lanka on an on-line, real time basis and will be operated by Lanka Clear (Pvt.) Ltd, the cheque clearing arm of Banks. The CPS is aimed at enhancing bank transaction volumes whilst reducing paper handling. It is expected that a fair amount of Cheque payments would get diverted to the proposed on-line real time payment facility. Payment of salaries will account for the bulk of transactions.

The main benefits to Banks’ customers will be:

• Real time realization of payments.
• 24 x 7 accesses to payment services.
• Enhanced security and reliable payment transactions.
• Multiple mode of access to CPS such as ATM, Internet, Phone Banking etc.

The Phase 1 services are expected to include,

• Third party Bank transfers
• Bill Payments
• Inward Remittances
• Statutory Payments
• Direct Debit Transactions
• Local Credit Card Payments