Dubai Launches 'Buna Payment System' on Sidelines of WGS 2024

Dubai Launches 'Buna Payment System' on Sidelines of WGS 2024

H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, launched the Buna Payment System for the Arab Regional Payments Clearing and Settlement Organisation.

The launch took place at the World Governments Summit (WGS) 2024, in the presence of the Governors of Arab Central Banks, and a number of senior officials from the financial sector.

Sheikh Maktoum emphasised the importance of enhancing Arab cooperation, economic and financial integration, and establishing connections with trading partners of Arab countries, directly or by linking financial infrastructure systems with similar systems in various countries. He noted that close cooperation helps to overcome challenges and capitalise on opportunities.

He said,

“As a hub for the flow of capital and trade among Arab countries, whose economic standing is increasing on a global scale, the role of the UAE is pivotal in promoting economic integration.”

In his opening address during the launch of the platform, His Excellency Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, said:

“The UAE’s hosting of the headquarters of the Arab Regional Payments Clearing and Settlement Organization in Abu Dhabi reflects the strategic importance of this institution and the leading role of the UAE as a global hub for trade and investment, especially since 63 percent of the platform’s transactions occurred in the dirham currency.”

He added,

“With the many opportunities for cross-border payment systems, the importance of the multi-currency system, Buna, encourages the use of Arab currencies in clearing and settling Arab transactions. Through Buna, Arab countries are making an effort to provide advanced and secure payment services for cross-border transactions, and to facilitate trade exchange and mutual investments.”

Sheikh Maktoum praised the tangible achievements made by the Buna Payments System since it began its operations, as it launched the instant settlement service for cross-border payments. The system has gained international acceptance, being viewed as a model that reflects the G20’s directions in developing and improving the efficiency of cross-border payment systems. This has been further reinforced by the platform’s high-level systems that have been well received by international regulatory institutions.

Dr. Fahad M. Alturki, Chairman of the Board of the Arab Regional Payments Clearing and Settlement Organisation, gave a speech in which he thanked His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, and H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum.

He expressed his gratitude to the UAE, represented by the Ministry of Foreign Affairs, Ministry of Finance, and the Central Bank of the UAE, for their gracious hosting of the institution, and their leading role in driving innovation in the financial sector in the Arab world and around the globe.

Dr. Fahad M. Alturki addressed the importance of enhancing financial inclusion and the role of payment systems as a pillar of the financial market infrastructure. The Buna system provides modern payment solutions that align with international standards, principles, and compliance requirements. It supports efforts to enhance economic and financial integration opportunities in the Arab region and deepen investment and trade ties with key trading partners across various continents. Participation in the system is available to all banks and financial institutions that meet the criteria and conditions of participation, primarily those related to compliance aspects.

He referred to the role of the Buna Payments System in enabling financial and banking institutions in the Arab region and beyond, including central and commercial banks, to send and receive interbank payments across the Arab region and beyond securely, reliably, cost-effectively, and efficiently. It forms an integrated and specialised system operated by the Arab Regional Payments Clearing and Settlement Organisation, fully owned by the Arab Monetary Fund. It provides clearing and settlement services in six currencies, including four Arab currencies: the Emirati Dirham, the Saudi Riyal, the Jordanian Dinar, and the Egyptian Pound, as well as two international currencies – the US Dollar and the Euro.

On the sidelines of the Buna system launch event, specialised sessions were held that discussed the nature of the system’s work and its future prospects. Participants included Fabio Panetta, Governor of the Bank of Italy; Mehdi Manaa, CEO of Buna; and Hana Al Rostamani, Group CEO of the First Abu Dhabi Bank.

Buna is operated by the Arab Regional Payments Clearing and Settlement Organization, which functions as an independent organisation fully owned by the Arab Monetary Fund. It contributes to enhancing economic and financial integration opportunities and supporting the investment links of the Arab countries with trading partners across different continents. It was established in response to an initiative proposed by the UAE during the Council of Arab Finance Ministers meeting, aiming to support economic stability in Arab countries.

Abu Dhabi hosts the headquarters of the institution in the building of the Arab Monetary Fund. A total of 108 Arab banks have completed linking with the platform out of 120 banks that have signed the linking agreement. The target is to link with 160 banks before the end of 2024. UAE financial institutions participating in the platform include First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Emirates NBD, Dubai Islamic Bank, Mashreq Bank, and RAKBANK.

News Source: Emirates News Agency

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