The Reserve Bank of India is hosting the 32nd annual meeting of the Asian Clearing Union in Bangalore on Monday to exchange information on the monetary and economic conditions in the member-countries, and the future role of the ACU.

Being hosted by RBI Governor Bimal Jalan, the meeting will be attended by the central bank governors of Bangladesh, Bhutan, Iran, Myanmar, Nepal, Pakistan and Sri Lanka. Two officials from the central bank of Thailand are also participating as observers.

An RBI official told rediff.com on Sunday that the meeting would take up the introduction of an integrated Real Time Gross Settlement for exporters and importers of the respective countries, and the technology upgradation in the banks for speedy transactions.

"As a clearing and settlement organisation, the ACU is unique in the region and complimentary to the regional trading blocks such as Saarc and Asean," the official added.

Set up in 1974, the ACU deals with the multilateral settlement of current account payments, conservation of foreign exchange reserves, promotion of monetary cooperation among the central banks and provide currency swap arrangements.

With a view to strengthening the payment and settlement mechanism, the committee of ACU members has recommended the setting up of a central clearing house to facilitate faster risk free transactions among the member countries.

"The focus of the ACU mechanism should continue to be payments and settlements of cross border transactions, all member countries should use the SWIFT system for sending messages on financial transactions, and use of currencies other than the US dollar for settlement," the official disclosed.

The ACU transactions shot up to $6.9 billion from a mere $50 million when it was introduced in 1975, with not a single instance of default on payments.