PARLIAMENT - Government has introduced an amendment bill to parliament that will give the Central Bank sweeping powers while exercising its regulatory powers over the national payment system, Sunday Times has learnt.
The bill that is yet to be discussed in parliament, but of which Sunday Times has obtained a copy, states that it intends to promote the soundness, safety and efficiency of the national payment.
“The Central Bank shall hold cash accounts for operators and participants, which may be used for the settlement within payment, clearing and securities settlement systems,” the bill reads in part.
The bill is an amendment to law n°12/2009 of 26/05/200 relating to commercial recovery and settlement of issues arising from insolvency.
Under the bill, the Bank is empowered to hold securities and precious metals on accounts of operators and participants, which may be used for the settlement within the clearing and securities settlement systems.
An operator may be a commercial bank, Telephony Company transferring money through mobile money or any other company operating a payment system.
According to the bill, the Central Bank will provide facilities to payment, clearing and securities settlement systems, but their operators and participants must extend credit in the form of cash or securities, against adequate collateral as determined from time to time by the Bank.
“Adequate collateral must be granted to the Bank in the form of a pledge or a transfer of title arrangement, including a repurchase agreement,” the bill reads.
If adopted as a law, the bill authorizes the Central Bank to establish, own, operate and participate in the ownership or operation of payment, clearing and securities settlement systems.
In its investigative powers, Central Bank auditors may carry out on-site inspections in the premises of systems, operators, issuers of payment instruments and participants.
The auditors have seizure powers to take copy of any relevant document or source of information they deem necessary for the exercise of their functions.
A sanction imposed by the Bank may be appealed against in competent courts.
In order to protect the systems, final discharge of any indebtedness between participants in a clearing and settlement system shall take place through the Central Bank system.
The law penalises a person who establishes or operates a system or issues payment instruments without having obtained a licence from the Central Bank with a fine ranging from Rwf 10Mn to Rwf 60Mn.
Speaking to Sunday Times, Central Bank Governor, Francois Kanimba said the bill is intended to give the bank powers to regulate the national payment system in the face of opportunities and challenges created by advances in information technology.
“Technology is advancing which has made commercial banks no longer monopolies of payment systems. Telecom companies are also doing so and a regulation is needed,” he said.
He added that the new law will provide industry players with benchmarks in their trade, and is in line with the bank’s ambitious plans to modernise the national payment system.