Reserve Bank of India Governor Bimal Jalan said there was need for increased trade volume between member nations of the Asian Clearing Union so that a Central Clearing House could be set up for the region.
Speaking at the 32nd annual meeting of ACU in Bangalore on Monday, Jalan said the report of a technical committee on the future role of ACU was ready and would be discussed at the two-day meeting.
Apart from India, the ACU groups Bangladesh, Bhutan, Iran, Myanmar, Nepal, Pakistan and Sri Lanka. Its objectives are multilateral settlement of current account payments, conservation of forex, promotion of monetary cooperation among central banks, increasing relationships among the banking systems of member countries and providing currency swap arrangements.
Besides the Governors of the central banks of these countries, representatives from Thailand are also participating in the meeting as observers.
Regarding the expansion of ACU membership, Jalan said it was necessary to make the mechanism more efficient and enhance the volume of trade routed through the arrangement.
''In this context, the committee has noted that administrative bottlenecks have been hampering the progress of use of the mechanism to some extent. If the ACU mechanism has to become popular, these bottlenecks have to be removed,'' he observed.
Jalan also said that the Asian Clearing Union could become a strong and non-political forum of central banks in the region to discuss issues relating to economic co-operation among member countries and foreign exchange and reserves management.
There was a strong need to expand ACU membership, Jalan said, adding besides Maldives, the possibilities of bringing in Thailand, China, Malaysia and countries like Tajikistan, Uzbekistan and others should be explored.
"The expanded membership will help in better utilisation of this important mechanism for the benefit of all members," he said.
He said that a "technical committee", which examined the future role of ACU had pointed out that neighbouring countries would join the mechanism only if they are convinced of the benefits they could derive from the membership.
"The forum could also facilitate exchange of experiences on developments taking place in the respective economies, problems faced by individual member countries among others," Jalan said.
He said compared to industrialised nations, developing countries were faring better and within the ACU, most of the member countries recorded annual growths in excess of four per cent during 2000-01.
"In the scenario of fast emerging developments, prompted by technology and deeper integration of global markets, it is imperative that ACU members should continuously update themselves technologically and be quick in adopting new and more efficient methods of operations," Jalan said.
Additional inputs: PTI
More from rediff