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Thursday, 29 March 2018 00:00 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
The Central Bank will soon spell out a timeline for the banking industry on how they should get about on mitigating the technological risks, a top official said.
“The Bank Supervision Department in the Central Bank will soon introduce some specific requirements to the banking sector with regards to the rising technological risks,” the Central Bank Assistant Governor Yvette Fernando said, at a forum on ‘Overcoming the Regulatory and Compliance Challenges in the Banking Sector’ organised by the Ceylon Chamber of Commerce on Monday.
She noted that these timelines would be introduced looking at the overall perspectives in the banking sector going forward.
“As the banking regulator we have already appointed two committees to look into fintechs and Blockchain, which the Bank Supervision Department is now working on,” she added.
In addition Fernando noted that they had also introduced some best practices and standards to the banking sector.
Meanwhile Financial Intelligence Unit (FIU) Director D.M. Rupasinghe said that they were only concerned about the structure of most of these fintech business models.
He believes there is no threat to Sri Lanka at present from those businesses, but is vigilant. “We are only concerned about the structure of their business models. There were some internet transactions which were used to finance terrorist activities and money laundering. That’s the rising risks developing from the technological advancement,” Rupasinghe added.
He pointed out that there was a need for a mechanism to monitor online transactions, while noting that the UK and the US were already working on it.
Rupasinghe said the Financial Action Task Force (FATF) had identified casino, gem and jewellery as well as real estate as the three most vulnerable sectors and the activities of people involved were closely monitored.
“We have already taken many steps to regulate and monitor those sectors,” he added.
KPMG Sri Lanka Managing Partner Reyaz Mihular also emphasised it was important for the regulator to keep abreast with the latest technological developments.
“Blockchain and cryptocurrencies are going to come around and they are here to stay. Therefore it is very important we work with all our regulators to be on board so that they are abreast of what these developments are. If not, it can be detrimental to the economy,” he stressed.
The Central Bank yesterday (28 March) said a claim in a recent news item that State Minister of National Policies and Economic Affairs Dr Harsha de Silva had “summoned the Monetary Board to his Ministry and asked the Board to implement ICTA’s shoddy payment gateway” is unfounded.
Clarifying the issue in a statement, the Central Bank said the State Minister convened a meeting of stakeholders to resolve a longstanding issue regarding the way forward on a National Payments Platform. “This was important to facilitate the digitalisation of the economy,” the Bank said.
The Central Bank said two independent members of the Monetary Board expressed an interest in participating in the meeting to assist in finding a solution to a long outstanding issue.
A consensus was reached on the way forward at this meeting chaired by State Minister Dr Harsha de Silva who facilitated the discussion, it clarified.
