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Arising out of the media exposures on the subject of a National Payment Platform, several interested parties have started to express opinions about the matter. As the subject matter is related and connected to various Acts and Legislation now in operation in the country, it has become necessary to invite the focus of the authorities on the issue as there appears to be a resurfacing of a resurgence by interested parties who wish to circumvent the laws in their business interest.
Hence this article is presented as a codification of the views received by the writer from persons who wished to express their concerns on the matter.
Further, all banking operations in the country are governed by the following Acts and Legislation.
In the last few weeks extensive coverage was given in the electronic media to a major violation of banking sector regulations, committed by an entity called Total Pay Ltd. functioning on the basis of approval granted by ICTA. This news expose affect the credibility and reputation of the Yahapalana Government.
According to the prospectus circulated boldly by Total Pay Ltd., it has been awarded the “right-to-operate” as a Digital Instruction Provider (DIP) for the National Payment Platform (NPP) by the Information Communication Technology Agency (ICTA). As a part of the “right-to-operate”, Total Pay has a web portal and iOS and Android applications, where users can register, add their payment source (bank account and credit card) and execute account based payments to merchants/business, one another, and government institution. Therefore, users are asked to share confidential banking information.
According to its website, Total Pay can carry out “user executed transactions” by transmitting instructions to the bank via the NPP to transfer funds from Account 1 at Bank A to Account 2 at Bank B. As a modular solution, Total Pay is able to go beyond the bank-to-bank transactions and initiate cash-to-bank transactions in real time bring in the unbanked population into the fray.
Questions have been raised:
(1) The Central Bank shall be the authority responsible for the preparation of a plan for a national payment system. The Central Bank shall also be charged with the responsibility of providing guidance and leadership for the establishment and development of payment, clearing and settlement systems in Sri Lanka.
(2) …
(3) In the exercise of its powers under this Act, the Central Bank may, notwithstanding anything to the contrary in any other law—
(a)regulate and supervise the services and facilities provided by any Bank, any other financial institution or person, with regard to the sending, processing and receiving of payment orders and instructions for the transfer of securities on its own account and for its customers in domestic or foreign currencies, and assist any bank or other financial institution in the establishment, operation and organisation of such services and facilities;
(b) establish, operate, organise, promote, participate or assist in the establishment, operation, organisation and promotion of, and regulate and supervise any system for the clearing and settlement of payments and other arrangements for the making or exchange of payments in domestic or foreign currencies;
39. (1) Every person who contravenes or fails to comply with any provision of this Act or any regulations made thereunder, or directive, direction, instruction or rule issued by the Central Bank in connection with any matter under those provisions, or a lawful request for information, records or documents, directed under this Act, shall be guilty of an offence, and—
(i) in the case of a natural person…
(ii) in the case of any other entity….
(2) Where a corporation or any other legal entity other than an individual, or an unincorporated body or organisation contravenes any provisions of this Act or any regulation made thereunder or any directives, directions, instructions or rules issued by the Central Bank, then, every director and member shall be liable for the contravention in the same manner and to the same extent as the corporation, legal entity or the unincorporated body or organisation as the case may be.
(The writer is a former Chairman, Bank of Ceylon.)