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									       Annual Report 2006-07                               Accounting, Budgeting and Payment System




  4 Accounting, Budgeting
    and Payment System

      The Accounting, Budgeting and Payment                Monetary     Fund,    International  Bank    for
System Department is responsible for the                   Reconstruction and Development and International
maintenance and safekeeping of accounting                  Development Association. Dealings with these
records and for the preparation of financial               organisations    include    currency   valuation
statements of the Bank. As such, it provides back          adjustments, use of rupees under the operational
office services to the Bank’s Financial Markets            budget and maintenance of value.
Department, Administration Department and
                                                                 Auctions of Government of Mauritius Treasury
Banking and Currency Division.
                                                           Bills/Bank of Mauritius Bills on the primary market
      As provider of back office services, the             are conducted every Friday. Transactions
Department exercises separate levels of control.           pertaining to successful bids are recorded in book
The Department also prepares and monitors the              entry form at the Bank, except in cases where
budget of the Bank and maintains records                   certificates of holdings are issued on request.
pertaining to transactions carried out by Primary          Furthermore, holders of Bills whose transactions
Dealers. The Department fulfils one of the key             are kept in book entry form at the Bank are
functions of central banking in managing and               provided with monthly statements.
exercising an oversight of the payment and
                                                                 The Department also records transactions
settlement systems.
                                                           relating to Treasury Notes, Five-Year Government
                                                           of Mauritius Bonds and Government of Mauritius
     Accounting                                            Bonds/Mauritius Development Loan Stocks, which
                                                           are issued in accordance with the annual Issuance
     The Department maintains accounting records
                                                           Plan. Treasury Notes are recorded in book entry
pertaining to, inter alia, foreign exchange transactions
                                                           form whereas certificates of holdings are issued for
and open market operations for Government of
                                                           Five-Year Government of Mauritius Bonds and
Mauritius Securities and Bank of Mauritius Bills.
                                                           Government      of   Mauritius     Bonds/Mauritius
     Foreign exchange transactions in respect of           Development Loan Stocks.
debt servicing, payments for consultancy services
                                                                 Section 31(1) of the Bank of Mauritius Act
and contributions to international organisations are
                                                           2004 requires the accounting of the Bank to be
carried out by the Bank on behalf of the
                                                           carried out in conformity with accounting principles
Government. Foreign currency receipts of
                                                           applicable to central banks and best international
Government are credited to their accounts
                                                           practices. The Bank therefore prepares its accounts
maintained at the Bank.
                                                           in accordance with International Financial
      The Committee of Officials, comprising               Reporting Standards in so far as they are practically
representatives from the Bank, the Accountant              applicable to Central Banks. In keeping with
General’s Office and the Government Debt                   international standards and with a view to
Management Unit, meets regularly to discuss issues         enhancing transparency, the Bank publishes
relating to the cash flow and borrowing                    financial statements in a more elaborate format.
requirements of Government. A sub-committee                The Bank’s balance sheet and income and cash flow
meets on Wednesdays to decide on the weekly                statements for the financial year ended 30 June
borrowing requirements of Government.                      2007 together with comprehensive notes are
                                                           presented in this report.
     The Department undertakes the processing of
transactions of Government with international                   The Bank also prepares a monthly statement
financial organisations such as the International          of assets and liabilities, which is published in the

                                                                                                                   101
             Accounting, Budgeting and Payment System                                  Annual Report 2006-07




      Government Gazette and in its Monthly Statistical             Securities received under repurchase
      Bulletin. A copy of the assets and liabilities is        agreements and securities delivered under
      submitted to the Minister in accordance with             reverse repurchase agreements are not
      section 32(6) of the Bank of Mauritius Act 2004.         recognised in the balance sheet of the Bank unless
      The statement of monthly assets and liabilities can      control of the contractual rights that comprise
      also be viewed on the Bank’s website.                    these securities is relinquished.
                                                                    Interest earned on repurchase agreements
           Profitability of the Bank                           and interest incurred on reverse repurchase
            Section 11(1) of the Bank of Mauritius Act         agreements are recognised as interest income and
      2004 states that the Board of Directors of the Bank      interest expense, respectively, over the life of
      of Mauritius ('the Bank') shall determine the net        each agreement.
      profits of the Bank for each financial year, after            The volume of repurchase transactions
      meeting all current expenditure for that year and        conducted by the Bank during the financial year
      after making such provisions as it thinks fit for bad    2006-07 amounted to Rs5,375 million whereas the
      and doubtful debts, depreciation in assets,              volume of reverse repurchase transactions stood at
      contributions to staff funds and superannuation          Rs55,292 million.
      funds and other contingencies.         The Bank’s
      accounts for the year ended 30 June 2006 was
                                                                    Budgeting
      approved by the Board on 28 September 2006.
                                                                    The Department is responsible for the
            The Bank realised a profit of Rs1,763.3 million
                                                               preparation of the budget of the Bank and for
      for the year ended June 2007 compared to Rs906.1
                                                               budgetary control. The budget is prepared in line
      million for the year ended June 2006. The higher
                                                               with the policy to be pursued by the Management
      amount of profit realised in 2006-07 arose mainly
                                                               of the Bank during the budget year and is geared
      from higher interest earned on foreign investments
                                                               towards continuously improving the efficiency of
      managed by the Bank and better performance of
                                                               the various areas of operations of the Bank.
      its investment portfolio with the Bank for
      International Settlements.                                    The budgeting process involves all the
                                                               departments of the Bank and their inputs are used
           Bank of Mauritius Bills                             to prepare the master budget of the Bank. These
                                                               inputs are categorised under three items, namely,
           Bank of Mauritius Bills are issued by the Bank      “Recurrent Expenditure-Personal Emoluments”,
      on the same terms and conditions as Government           “Recurrent Expenditure-Other Charges” and
      of Mauritius Treasury Bills. The cost of servicing of    “Capital Expenditure”. A zero-base budgeting
      Bank of Mauritius Bills is accounted for as an           approach is recommended as far as possible.
      expense in the accounts of the Bank.
                                                                     The master budget is discussed with
           Bank of Mauritius Bills issued and outstanding      Management and then presented to the Audit
      are revalued at the end of each month and are            Committee of the Bank before submission to the
      marked to market in line with the requirements of        Board of Directors for approval. The budget of the
      International Financial Reporting Standards. The         Bank for the year 2007-08 was prepared in the light
      nominal amount of Bank of Mauritius Bills                of the restructuring process undertaken at the Bank
      outstanding in the books of the Bank stood at            as well as the move to the New Headquarters
      Rs6,003.7 million as at 30 June 2007 compared to         Building. It was presented to the Audit Committee
      Rs4,286.1 million as at end-June 2006.                   on 12 June 2007 and approved by the Board on 13
                                                               June 2007.
           Repurchase Transactions
                                                                     The financial performance of the Bank is
           A repurchase (repo) transaction is considered to    continuously monitored against the budget. Budget
      be a short-term loan at a guaranteed rate of interest.   reports, which are prepared and submitted to
      In the books of the Bank of Mauritius, repurchase        management regularly, act as an early warning
      transactions are treated as collateralised financing     system that triggers strategic decisions in a timely
      transactions and are carried out at the amounts of       manner. Material variances and trends are
      cash advanced or received plus accrued interest.         highlighted with a view to taking corrective action


102
       Annual Report 2006-07                            Accounting, Budgeting and Payment System




as appropriate. An Annual Budget Report                 and Settlement System (MACSS). The MACSS is
comparing the actual results with the budget is         the Systemically Important Payment System for
prepared after the end of each financial year and       Mauritius and complies with the Core principles of
submitted to the Board of Directors of the Bank.        Systematically Important Payment Systems
The Budget report for the year 2005-06 was              (CPSS) issued by the Bank for International
discussed with the Audit Committee on 19                Settlements (BIS).
September 2006 and then presented to the Board                Transactions routed through the system have
on 28 September 2006.                                   been on the increase over the years both in terms
     The budget is also monitored on a                  of volume and value. Compared to the Financial
departmental basis. Reports on the budget               Year 2005-06, the daily average number of
performance of each Department are prepared and         transactions increased in the Financial Year 2006-
submitted to the Management of the Bank at              07 by 25 per cent, that is, from 379 to 474
regular intervals. The reports compare actual and       transactions, whereas the average value of
budgeted performance and also provide a basis for       transactions increased by 80 per cent, from
feedforward control. Heads of Departments are also      Rs2,257 million to Rs4,071 million during the
provided with actual figures pertaining to their        same period.
respective departments. These figures are                     The MACSS is enhanced as and when required
compared with departmental budgets and                  in order to derive maximum benefit from the
appropriate control actions are taken at the level of   system. The Automated Clearing Module
each department within the overall budgetary            incorporated in the system caters for the electronic
control framework of the Bank.                          transmission of settlement files for the Port Louis
                                                        Automated Clearing House (PLACH). The system
                                                        also accommodates the electronic submission of
PAYMENT SYSTEM
                                                        statistical returns by banks as well as the
     Mauritius Automated Clearing and                   communication of data for the Mauritius Credit
Settlement System (MACSS)                               Information Bureau (MCIB).

     The statutory task of setting up an electronic          The MACSS Terms and Conditions and
                                                        Participant Procedures are available on the
system for the settlement of payments rests with
                                                        Bank’s website.
the Bank of Mauritius as per section 48 of the Bank
of Mauritius Act 2004. The Bank launched, in                 Table 4.1 provides details of transactions
December 2000, a real time gross settlement             routed through the MACSS for the period July 2006
system known as the Mauritius Automated Clearing        to June 2007.




                                                                                                               103
               Accounting, Budgeting and Payment System                                        Annual Report 2006-07




      Table 4.1: Mauritius Automated Clearing and Settlement System (MACSS): Total Transactions

                                                                                                         Daily Average
                                                       Number of       Value of      Number
                                                      Transactions   Transactions    of Days       Number of       Value of
                                                                                                  Transactions   Transactions

                                                                      (Rs million)                                (Rs million)

        2006
               Jul                                        8,449          45,797        21             402           2,181
               Aug                                        9,188          58,410        21             438           2,781
               Sep                                        9,031          87,413        21             430           4,163
               Oct                                        9,971          79,308        21             475           3,777
               Nov                                        9,691          82,813        21             462           3,944
               Dec                                       10,637          97,758        20             532           4,888

        2007
               Jan                                       10,020        103,090         21             477           4,909
               Feb                                        9,015          91,641        18             501           5,091
               Mar                                       10,367        109,476         20             518           5,474
               Apr                                       10,365          93,885        21             494           4,471
               May                                       10,843          71,934        22             493           3,270
               Jun                                       10,052          88,028        21             479           4,192

        2006-07                                         117,629       1,009,553       248             474           4,071

        2005-06                                          95,800        570,929        253             379           2,257



           Port Louis Automated Clearing House                    objectives and responsibilities of the Port Louis
                                                                  Automated Clearing House (PLACH), the liabilities
            Section 48(1) of the Bank of Mauritius Act            and responsibilities of the participating banks and
      2004 provides for the Bank to organise, in                  the relationship between the Bank of Mauritius and
      conjunction with banks, a clearing house to                 the participating banks.
      facilitate the clearing of cheques and other
      payment and credit instruments and to issue                        Following the enactment of the Banking Act
      instructions concerning such instruments, their             2004, section 44A of the Bills of Exchange Act has
      processing, collection, payment and retention and           been amended to provide for the presentment of
      the functioning of other clearing houses that the           cheques for payment by electronic means.
      Bank may authorise.                                         Accordingly, a banker may present a cheque for
                                                                  payment to the banker on whom it is drawn by
           Furthermore, section 48(6) of the Act                  notifying him of its essential features by electronic
      empowers the Bank to issue instructions or to make          means or by any other means as may be specified
      regulations for the smooth functioning of a clearing        by the Bank of Mauritius instead of presenting the
      house and payments system.                                  cheque itself.
            In line with the above provisions of the law, the
                                                                        The Bank of Mauritius, with the collaboration
      Bank of Mauritius, in collaboration with other
                                                                  of banks and the Mauritius Bankers’ Association
      participant banks, operates the Port Louis Automated
                                                                  Ltd, has embarked on a project of Cheque
      Clearing House (PLACH) on terms and conditions that
                                                                  Truncation for Mauritius. With the coming into
      have been stipulated in a set of rules known as the
                                                                  operation of the Cheque Truncation System, which
      Port Louis Automated Clearing House Rules, which
                                                                  is an online image-based clearing system, cheque
      are available on the Bank’s website.
                                                                  images and relative MICR data will be captured and
            These Rules serve to provide, inter alia, the         transmitted electronically to the Automated
      basic understanding and agreement by and among              Clearing House. This system will also entail
      participating banks in the Clearing House, the              significant changes to the PLACH Rules.


104
         Annual Report 2006-07                          Accounting, Budgeting and Payment System




      Cheques in Mauritius are standardised and use              As at 30 June 2007, the following
Magnetic Ink Character Recognition (MICR)                   printers/encoders of MICR cheques were accredited
technology. The use of reader/sorter machines               by the Cheque Standards Committee:
enables the exchange of details on cheques among
participants    and    settlement      is  effected              (i)        De La Rue Currency and Security Print.
electronically via the MACSS. The Accounting,                    (ii)       Madras Security Printers.
Budgeting and Payment System Department is
responsible for the supervision of settlements.                  (iii) Master’s Continuous Stationery Ltd.

     The accreditation for the printing and encoding             (iv) Mauritius Stationery Manufacturers Ltd.
of MICR cheques is granted by the Cheque Standards               (v)        Excel Secure Technologies Ltd.
Committee, which is chaired by the Assistant
Director-Accounting, Budgeting and Payment                       Table 4.2 provides data on cheques cleared
System. The Committee comprises representatives             through the Port Louis Automated Clearing House
from banks, the Association of Printers of Mauritius        as well as the Port Mathurin Clearing House
and the Mauritius Bankers Association.                      in Rodrigues.



Table 4.2: Cheque Clearances

                                                                                                  Daily Average
                                               Number of        Amount            Number
                                                Cheques                           of Days    Number of       Amount
                                                                                              Cheques
                                                                (Rs ‘000)                                    (Rs ‘000)


  2006
         Jul                                     439,834       16,863,937            21        20,944        803,045
         Aug                                     429,785       16,294,314            21        20,466        775,920
         Sep                                     421,650       17,104,810            21        20,079        814,515
         Oct                                     455,243       19,217,504            21        21,678        915,119
         Nov                                     451,305       17,925,915            21        21,491        853,615
         Dec                                     479,019       20,631,281            20        23,951     1,031,564

  2007
         Jan                                     437,741       17,539,887            21        20,845        835,233
         Feb                                     367,348       16,776,704            18        20,408        932,039
         Mar                                     426,744       16,885,412            20        21,337        844,271
         Apr                                     431,502       17,141,597            21        20,548        816,267
         May                                     457,204       18,282,014            22        20,782        831,001
         Jun                                     427,464       18,099,615            21        20,355        861,886

  2006-07                                       5,224,839     212,762,990           248        21,068        857,915

  2005-06                                       5,300,400     193,477,220           253        20,950        764,732




      Intrabank cheques are cheques that are                     Payment Systems Oversight
drawn by customers of a particular bank and are                  In terms of Section 4(2)(b) of the Bank of
presented over the counter at that bank. These              Mauritius Act 2004, one of the objects of the Bank
cheques are not channelled through the Port Louis           of Mauritius is to ensure the stability and soundness
Automated Clearing House. Table 4.3 provides                of the financial system of Mauritius. One of the
details on cheques cleared over the counters of             means of achieving this objective is through the
banks on the last working day of each month.                oversight of the payment systems.



                                                                                                                         105
               Accounting, Budgeting and Payment System                               Annual Report 2006-07




      Table 4.3: Intra Bank Cheque Clearing Transactions      Department in close collaboration with the Banking
                                                              Supervision and the Financial Markets Departments
         Last working       Number of         Amount          and the Banking and Currency Division.
            day of           Cheques         (Rs' 000)

                                                                   Central Depository and Settlement
        2006
                                                                   System
               Jul           27,079            930,770
                                                                    The Bank of Mauritius administers the daily
               Aug           24,438            888,292
                                                              settlement of funds in respect of transactions
               Sep           30,516          2,238,351
                                                              carried out on The Stock Exchange of Mauritius Ltd
               Oct           25,329          1,041,383
                                                              by stockbrokers and custodian banks through the
               Nov           26,239          1,156,827        Central Depository and Settlement System. During
               Dec           44,508          3,614,227        2006-07, settlements for a total amount of
                                                              Rs2,909.3 million were effected through the
        2007
                                                              MACSS. The settlement of secondary trading of
               Jan           28,065          1,130,486
                                                              Bills on The Stock Exchange of Mauritius Ltd, which
               Feb           25,600            971,030
                                                              amounted to Rs104.9 million in 2006-07, is
               Mar           30,560          1,850,068        however excluded from this figure.
               Apr           32,447            980,735
               May           25,027          1,081,260
                                                                   Abandoned Funds
               Jun           35,133          1,800,212
                                                                    Under section 59 of the Banking Act 2004,
                                                              banks are required to transfer to the Bank of
           Payment systems are essential vehicles for         Mauritius deposits or monies lodged with them for
      the implementation of monetary policy. The              any purpose that have been left untouched and not
      oversight function aims at safeguarding the             claimed for 10 years or more and the customer has
      transmission channel for monetary policy and            not responded within 6 months to a letter from the
      maintaining systemic stability in payment systems.      financial institution about the dormant deposit or
      The oversight function also has the responsibility of   money. These funds, once transferred to the Bank
      ensuring that the general organisation of payment       of Mauritius, do not carry interest and are only
      flows within the economy is efficient and safe so       refunded to the financial institution for repayment
      that public confidence in payment systems is            to owners of the funds or their heirs or assigns on
      maintained. The Bank of Mauritius has the               rightful claims being established to the satisfaction
      responsibility of promoting the safety and efficiency   of the central bank.
      of existing and planned systems, assessing them
                                                                    Further, section 57(6) of the Act stipulates
      against objectives set and, where necessary,
                                                              that where a customer’s deposit or money lodged
      inducing change.
                                                              with a financial institution for any purpose,
           In Mauritius, payment streams comprise             becomes less than the minimum balance
      large value payments, settlement of securities          requirement in force in a financial institution from
      and low value payments. Large value payments            time to time and it has been left untouched for a
      and the settlement of securities are effected           period of one year and the customer has not
      through the MACSS. Low value payments are               responded within six months to a letter from the
      processed through the Port Louis Automated              financial institution informing him of any service
      Clearing House and settled through the MACSS.           fees or charges that may be applicable on the
      Settlement in respect of credit cards is also done      deposit or money for having fallen below the
      through the MACSS.                                      minimum balance, the deposit or money shall
                                                              without formality be handed over forthwith by the
            The ongoing oversight function comprises the
                                                              financial institution to the customer concerned in
      collection of information from daily reports on the
                                                              person, failing which it shall be transferred to the
      movement of liquidity among participants of the
                                                              central bank to be dealt with in the manner referred
      MACSS and data from other sources, the analysis of
                                                              to in section 59.
      the information and the initiation of action as
      appropriate. The oversight function is conducted             Accordingly, transfers to the Bank in respect
      by the Accounting, Budgeting and Payment System         of abandoned funds amounted to Rs155.7 million,


106
         Annual Report 2006-07                             Accounting, Budgeting and Payment System




USD 34,348.88, GBP6,949.53 and EUR68.10 as at                          (or debit) position could be determined
30 June 2007.                                                          based on the average value of its
                                                                       country’s total annual trade within
                                                                       COMESA during the previous three years);
     Regional Payment             and     Settlement
     System (REPSS)                                             •      Utilisation of Central Bank’s account with
                                                                       the Federal Reserve Bank of New York
      The COMESA Clearing House is presently
                                                                       for effecting payment, in case of being a
developing a system to improve the flow and
                                                                       net payer, to REPSS Settlement Account
settlement of cross-border payment transactions
                                                                       or receiving USD from the REPSS
among financial institutions for the benefit, inter
                                                                       Settlement Account in case of a net
alia, of importers and exporters in the various
                                                                       credit balance;
member countries. This system is called Regional
Payment and Settlement System (REPSS) and its                   •      Defining of REPSS business parameters
objectives are to:                                                     relating to holiday files, collateral etc;

     (i)    increase competition among the banks in             •      Selection of 2 commercial banks for the
            the region,                                                pilot;

     (ii)   improve financing services,                         •      Presentation of REPSS to the National
                                                                       Working Group for ensuring full
     (iii) lower costs to        complete     payment
                                                                       understanding of the operations of the
           commitments,
                                                                       cross border payment system.
     (iv) promote the expansion of trade among
          member countries, and
                                                                SADC Payment Systems Project
     (v)    improve final funds availability to the
                                                                The main objective of the SADC Payment
            exporter.                                      Systems Project is to foster co-operation and
      As mandated by Governors on 20-21 October            coordination between SADC central banks on
2006 in Madagascar, the report of the Technical            payment, clearing and settlement systems so as to:
Evaluation Committee was considered by COMESA                   (i)    Develop and implement in each SADC
Contracts Committee in Djibouti in November 2006                       member state a safe and efficient
and its recommendations submitted to the Council                       domestic payment system based on
of Ministers. Council decided to award the contract                    nationally accepted principles;
for the Procurement of Software and Hardware for
REPSS to CMA Small Systems AB of Sweden (CMA).                  (ii)   Define and implement a regional cross-
Council further decided that COMESA Secretariat                        border payments strategy;
enters into negotiations with CMA Small Systems                 (iii) Identify, measure, maximise            and
AB for the establishment of a mutually acceptable                     manage payment systems risks;
solution in all aspects and to finalise a contract with
the vendor. COMESA Secretariat met with the                     (iv) Achieve convergence of payment,
vendor in December 2006 and finalised and signed                     clearing and settlement features,
                                                                     policies, practices rules and procedures
a contract with CMA Small Systems AB. The
                                                                     across SADC regions and
application development started in March 2007.
                                                                (v)    Conduct an ongoing payment systems
    The pre-implementation and implementation
                                                                       oversight that is aimed at reducing and
phase of REPSS will involve the following:
                                                                       eliminating cross-border settlement risk
     •      Setting up of bilateral counterparty                       and systemic financial shocks.
            aggregate limits and individual net
                                                                The SADC payment System Project-Annual
            settlement limit for which collateral will
                                                           Regional Conference was held at Centurion Lake
            be needed for securing daily settlement
                                                           Hotel in South Africa from 18 to 20 September
            of end of day position at the clearing
                                                           2006. The main themes discussed at the
            house. This could include Net Debit
                                                           conference were as follows:
            (Payer) and Net Credit (Receiver) limits
            (the limit of each Central Bank’s net credit        •      Report on the Project since its inception.



                                                                                                                    107
               Accounting, Budgeting and Payment System                                 Annual Report 2006-07




           •      International   Trends   in    Settlement     technology, cheque truncation lowers the risk of
                  Systems.                                      fraud and levels both the settlement and liquidity
                                                                risk within the entire payment workflow. This
           •      Securities Market Development issues.
                                                                process eliminates the actual cheque movement
           •      FSAP     experiences     in     developing    involved in clearing and hence reduces the delays
                  countries.                                    associated with the movements of cheques.
           •      Card payments in SADC.                             A    Steering    Committee      under    the
                                                                Chairmanship of the Bank of Mauritius and
           •      The way forward on Regional Issues.
                                                                comprising representatives from the Mauritius
            A regional conference was held from 2 to 4          Bankers’ Association Ltd and eight banks, was set
      April 2007 in Livingstone, Zambia. The main               up in September 2006 to direct the project and
      themes discussed at the conference were as                define requirements.
      follows:
                                                                        In order to have a better insight into the
           •      Central bank’s involvement in retail          system and to identify the various stages leading to
                  payments:     Policy   issues   and           the implementation of the system, presentations
                  implications.                                 were made for the attention of the Steering
                                                                Committee by a few service providers. Further, a
           •      Securities Settlement Systems in the
                                                                delegation led by the First Deputy Governor and
                  SADC region.
                                                                comprising representatives from the Bank of
           •      Development of Correspondent Banking          Mauritius, banks and the Chief Executive Officer of
                  in the region.                                the Mauritius Bankers Association Ltd, paid a study
                                                                visit to Hong Kong and Singapore in May 2007.
           •      General principles for        International
                  Remittances services.                              After considering the different models for the
                                                                implementation of the Cheque Truncation System
           •      Remittances-International and SWIFT
                                                                in Mauritius, a decision was reached on the model
                  developments.
                                                                to be adopted. The central bank will be hosting the
           •      Challenges of RTGS Cost Recovery: The         application and archiving of cheque images. The
                  South African model.                          legal impediments with respect to the retention
           A Country Leaders’ meeting was also held on          period of physical cheques and cheque images are
      4 April 2007.                                             being addressed.


                                                                     BANKING AND CURRENCY DIVISION
           CURRENT DEVELOPMENTS
                                                                     The Banking and Currency Division is made up
           Cheque Truncation System                             of the Banking Office, the Currency Office and the
                                                                Rodrigues Office.      It is entrusted with the
            With a view to further modernise the                responsibilities relating to the issue and
      payment system in Mauritius, the Bank of                  management of the domestic currency and the
      Mauritius, with the collaboration of banks and the        maintenance of accounts.
      Mauritius Bankers’ Association Ltd, has embarked
      on a project of Cheque Truncation for Mauritius.
      The Cheque Truncation Project has been prompted                THE BANKING OFFICE
      by the need to improve the speed and efficiency of
                                                                     The Banking Office is responsible for providing
      clearing processes.
                                                                banking services and manages accounts on behalf
           The Cheque Truncation System is an online            of   the     Government,     commercial       banks,
      image-based clearing system, where cheque                 international financial institutions and staff
      images and MICR data are captured and                     members. It is also responsible for the sale of
      transmitted electronically to the Automated               industrial gold to manufacturers of jewellery as well
      Clearing House via a secure broadband                     as the sale of Dodo Gold coins and commemorative
      communications network. Through secure imaging            coins to the public.




108
       Annual Report 2006-07                            Accounting, Budgeting and Payment System




     Sale of Gold                                            3.   150th Anniversary of the Mauritius
     The Bank of Mauritius imports and sells gold                 Chamber of Commerce & Industry Silver
of high quality, that is, 24 carats 999.9 assay in                and Gold Coins
bar forms of 1,000 grams, 500 grams and 100                       A gold commemorative coin of Rs1,000
grams and in grain forms to industrialists and                    denomination and a silver commemorative
licensed jewellers.                                               coin of Rs10 denomination both in proof
     The selling prices of industrial gold, based on              condition were issued in January 2000 to
prevailing international gold market prices are                   mark the 150th anniversary of the
posted daily in the Banking Hall of the Bank.                     Mauritius Chamber of Commerce &
                                                                  Industry. The sale prices of the gold and
                                                                  silver coins in presentation cases are
     Sale of Dodo Gold Coins                                      Rs6,750 and Rs650 respectively.
     Dodo Gold coins of 22 carats are issued by              4.   Centenary of the Arrival of Mahatma
the Bank of Mauritius in four denominations,                      Gandhi in Mauritius
namely, one ounce with a face value of Rs1,000,
half an ounce with a face value of Rs500, quarter                 A silver commemorative coin of Rs100
of an ounce with a face value of Rs250 and one-                   denomination in proof condition was
tenth of an ounce with a face value of Rs100. The                 issued in November 2001 to mark the
coins are legal tender in Mauritius for the value                 centenary of the arrival of Mahatma
stated thereon.                                                   Gandhi in Mauritius. The sale price of
                                                                  the coin in presentation case is Rs725.
      The Dodo Gold coins are on sale at the Bank
of Mauritius and banks licensed by the Bank of
Mauritius. They are also marketed overseas by the            THE CURRENCY OFFICE
Royal Mint of the United Kingdom. The daily selling
                                                             The Currency Office discharges the Bank’s
prices of the coins, based on their gold content and
                                                        statutory obligation to ensure that there is an
on the international gold market prices, are posted
                                                        adequate supply of banknotes and coins to meet
in the Banking Hall of the Bank.
                                                        the demand of the public in Mauritius. Its key
                                                        areas of work include:
     Sale of Commemorative Coins
                                                             •    Ensuring the availability and supply of
     The under mentioned commemorative coins                      good quality coins and banknotes to
are also on sale at Bank of Mauritius to members of               commercial banks.
the public.
                                                             •    Accepting the deposits of banknotes and
     1.   Tenth Anniversary of the Independence                   coins from commercial banks.
          of Mauritius
                                                             •    Attending to the destruction of soiled
          A silver commemorative coin of Rs25                     banknotes.
          denomination was issued to mark the
          10th anniversary of the independence of             During the financial year 2006/2007,
          Mauritius. The sale price of the coin is      banknotes and coins deposited at and issued by the
          Rs25.                                         Bank amounted to Rs13,818 million and Rs15,115
                                                        million, respectively.     From the deposits, an
     2.   1997 Golden Wedding Collector Coin            amount of Rs8,932 million in banknotes were
          Programme                                     examined, out of which an amount of Rs3,147
          A silver commemorative coin of Rs20           million was found to be unfit for circulation and was
          denomination was issued in May 1998 in        withdrawn for destruction. The Bank examined
          proof condition to mark the 50th              about 23 million banknotes from which 54 per cent
          wedding anniversary of Queen Elizabeth        were found to be fit for circulation.
          II and Prince Philip. The sale price of the
          coin in presentation case is the rupee
          equivalent of GBP20.




                                                                                                                109
             Accounting, Budgeting and Payment System          Annual Report 2006-07




           THE RODRIGUES OFFICE

             The Bank’s office in Rodrigues offers central
      banking services and maintains accounts on behalf
      of Government, commercial banks and staff
      members.       The office also conducts over-the-
      counter sales of Government of Mauritius Treasury
      Bills to individuals and non-financial corporations.
            It has the task of ensuring the availability and
      supply of coins and banknotes to meet the
      demands of banks in Rodrigues. Consignment of
      banknotes and coins are therefore made regularly
      to and from the Office in order to meet the needs
      of Rodrigues in cash and to maintain the good
      quality of banknotes and coin in circulation.




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