Role of Central Bank in Payment Mechanism :

The central bank of a country is responsible in applying the core principles for ensuring that an efficient and cost effective payments system is in place.

The central bank should:

– Clearly define the payment system’s objectives and should publicly disclose the role and major policies in respect the payments system

– Ensure that the system is operating efficiently as per the core principles

– As supervisor and facilitator oversee that banks comply with the system’s core principles.

– Co-ordinate and co-operate with other central banks for effective implementation of the payments system