Banking - financial institutions must encourage the use of modern payment systems such as the card-based system because it is a necessary precondition for business development and economic growth, the Central Bank Governor, François Kanimba said, yesterday.
Payment by means of cards contributes to stable macro-economic environment which positively impacts the efficiency of economic growth,” Kanimba said.
He made the call during a press briefing on the card-based payment system in the country at the Banks’ office.
The Governor said that the card-based payment system will keep money in the banking system, a move that increases liquidity and facilitates banks lending to the economy.
“The efficiency of the card payment system will help to reduce their operating costs (banks) and less use of cash provides longer lifespan of banknotes thus reducing money spent by government on printing banknotes,” Kanimba said.
The Central Bank and the Ministry of Finance have facilitated banks and SIMTEL to ensure that the card-based payment system spreads throughout the country to reduce cash-based transactions.
SIMTEL is the operator of the Rwandan switch for inter-bank ATM (Automatic Teller Machine) services.
Kanimba’s call comes after SIMTEL, commercial banks and government three agreements including the service level agreement, new shareholders’ and card subsidy agreement.
Government is committed to subsidize the cost of chip and pin technology for every card issued by $4 until the end of 2012.
Dirk Harbecke, Chief Executive Officer of African Development Corporation (ADC), hailed the government’s commitment towards modern payment systems and promised efficient and reliable services. SIMTEL also promised to ensure network security, access control security and banks’ data protection.
SIMTEL production capacity is expected to increase from current 15,000 cards to 50,000 cards per month.
This will substantially cut down the time it has been taking for banks’ clients to obtain cards from the previous three months to between two and five days. It’s indicated that about 7700 cards were issued between February and August 2010.
Currently, 70ATMs have been installed countrywide with 10 of them accepting international cards. Banks have also committed to increase ATMs to 400 by 2012.