MUSCAT: As per the agreement endorsed on January 5, 2021, in the city of Al Ula, the objective is to enhance the safety and efficiency of the joint payment systems and reduce any potential risks to them in order to maintain financial stability in the participating GCC countries.

The agreement aims to establish and develop supervisory powers of central banks for the payment systems. It also seeks to establish and maintain a regional infrastructure as a 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 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.

Participation of the GCC countries in the system is optional, based on the readiness of each country, and the same is not linked to their contribution to the establishment of any GCC payment company.