Payments System Board Annual Report – 2006 The Payments System Board and Governance

Role and Composition of the Payments System Board

The Payments System Board was established in 1998 by amendment of the Reserve Bank Act 1959. It has responsibility for the Bank's payments system policy and is required to exercise this responsibility in a way that will best contribute to:

  • controlling risk in the financial system;
  • promoting the efficiency of the financial system; and
  • promoting competition in the market for payment services, consistent with the overall stability of the financial system.

The Payments System Board comprises the Governor, who is Chairman, one representative of the Reserve Bank appointed by the Governor, one representative of the Australian Prudential Regulation Authority appointed by APRA and up to five other members appointed by the Treasurer for terms up to five years. Details of the current members are set out on page 41. Five members form a quorum at a meeting of the Payments System Board.

Meetings of the Payments System Board

The Reserve Bank Act does not stipulate the frequency of Board meetings. Since its inception, the Board's practice has been to meet at least four times a year, and more often as needed (Table 9).

Conduct of Payments System Board Members

On appointment to the Board, each member is required under the Reserve Bank Act to sign a declaration to maintain secrecy in relation to the affairs of the Board and the Reserve Bank. Further, members must by law meet the general obligations of directors of statutory authorities, as set out in the Commonwealth Authorities and Companies Act 1997 (CAC Act). The CAC Act sets standards of conduct for directors and officers of Commonwealth authorities, with many of these requirements being modelled on comparable areas of the Corporations Law. As such, members of the Payments System Board must:

  • discharge their duties with care and diligence;
  • act in good faith, and in the best interests of the Reserve Bank;
  • not use their position to benefit themselves or any other person, or to cause detriment to the Reserve Bank or any person;
  • not use any information obtained by virtue of their position to benefit themselves or any other person, or to cause detriment to the Reserve Bank or any person; and
  • declare any material personal interest where a conflict arises with the interests of the Reserve Bank.


Fees of the non-executive members of the Payments System Board are determined by the Remuneration Tribunal.


Under the provisions of Section 27 of the CAC Act and pursuant to a resolution by the Reserve Bank Board on 3 November 1998, members of the Payments System Board have been indemnified against liabilities incurred arising out of the proper discharge of their responsibilities, provided that any such liability does not arise from conduct involving a lack of good faith. This indemnity does not extend to claims by the Reserve Bank itself or any subsidiary of the Bank.