RIYADH, 22 January — Steps are under way to extend the SARIE system, through which Gulf banks could settle inter-bank transactions in real time through online banking. A technical committee has been set up to study the issues involved and formulate measures in this regard.

This was disclosed by Hamad Al-Sayyari, governor of the Saudi Arabian Monetary Agency while inaugurating the Third GCC Banking and Financial Institutions Conference organized by GCC Banking Institutes here yesterday.

Bankers and executives from financial institutions from the Kingdom, other GCC states, Britain, Ireland and the US are participating in the two-day conference, which will discuss various aspects of the financial services industry against the background of technological innovations, global competition and the growing need for manpower development.

Dr. Abdullatif M. Ghaith, director general of the Institute of Banking at SAMA, was among those present. Pointing out that the GCC states have achieved progress in integrating their banking systems, the governor said they have agreed to join SAMA’s Real Time Gross Settlements (RTGS) system, known as SARIE, to facilitate instant transactions in an electronic environment.

He said banks in the GCC states have already been allowed to open branches in the region under certain conditions.

Al-Sayyari also referred to the GCCNet ATM card that can be used for cash withdrawals in all GCC states. Saudi Arabia, Kuwait and Qatar have already joined the Net, while Bahrain will be hooked up soon.

The governor expressed his hope that the conference would address the challenges facing the banking sector, especially those stemming from globalization, information technology, free market and human resources development.

In his presentation, Al-Ghaith outlined the measures for invigorating the banking institutes by offering relevant training programs and special education to upgrade the skills of the local employees. He called for greater cooperation between the institutes and the banking industry for promoting human resources development and managerial expertise to serve the needs of the financial services industry.

Al-Ghaith said there was an ongoing cooperation among the GCC banking institutes, of which the present conference was an example.

Describing Saudization as a matter of strategic and vital concern in the Kingdom, he said IOB stands at the forefront of the campaign by developing specialized courses, apprenticeship and on-the-job training for a broad spectrum of the financial services industry. The director-general cited the case of one bank which was able to absorb over 130 Saudis in its credit section. Overall, Saudis constituted around 75 percent of the banks’ work force.

In his keynote speech, Don Reynolds, consulting economist and futurist at the 21st Century Forecasting, Texas, stressed the need for diversification of the GCC economy by promoting the non-oil sector, such as tourism and consumer-oriented business activities. Such a paradigm shift would create wealth and job opportunities.

Speaking on the future outlook for GCC banks, Dr. Said Al-Sheikh, chief economist of the National Commercial Bank, said consumer banking is a potential growth area in view of the population bulge in the GCC states.

0He said the banks have already invested heavily in their technological upgrade as part of their strategy to boost consumer banking.