By Gary Hatigeva
THE National Government through the Central Bank of Solomon Islands (CBSI) and development partners is now working to adopt and introduce an internationally recognised and standardised Payment System law, which experts say will help the country’s economy.
Consultations and discussions were held yesterday on a drafted National Payment System (NPS) Bill 2018 that looks to strengthen areas of the national payment system in the country, involving major financial institutions, both local and international.
This came following an approved cabinet conclusion that agreed to have a new law on the country’s Payment System, which saw successful collaboration between the office of the Attorney General, the Ministry of Finance and Treasury, and CBSI.
When approved, the group was tasked with an objective to provide the country with modern and efficient payment systems, to ensure the financial stability of the market and increase the level of access to finance of the population.
In his overview presentation on the NPS, facilitator and World Bank Group’s Senior Payment Systems & Remittances Specialist, Mr Carlo Corazza explained that the new legal framework will extend the supervisory responsibilities of CBSI, in line to the recommendations of the international standards, in its securities clearing and settlement systems; retail payments and money payment service providers.
The draft bill pretty much looks into giving Central Bank the necessary and appropriate mandates to regulate and manage the Payment System.
“The NPS policy paper formulated in 2016 with the assistance of the WBG Payments System Development Group and IFC explains the next step in this process, which ideally is to reform the legal and regulatory framework in the area of payment systems and allow the CBSI to have the necessary and relevant mandate to regulate, oversee and manage the NPS.”
Participating Stakeholders were told that Payment and Settlement System plays crucial role in effective and efficient circulation of money in the economy thus giving boost to trade & business.
Corazza further explained that this system is recognised worldwide that an efficient and secure payment system is an enabler of economic activity.
He said this system provides the important channels for effective payments and transmission of monetary policy.
“And the role and functionality of Payment systems have been changing gradually with advancement in products and technologies”, something the Central Bank Governor highlighted when giving his remarks at the official opening of the consultations.
Meanwhile, the overview statement explained that a country-wide consultation on the Policy Note was carried out in 2017, and in the same year, the World Bank Payments System Development Group and International Financial Cooperation engaged a legal expert to draft Solomon Islands Payments System Bill.
“CBSI is working in partnership with Solomon Islands Government, the World Bank Payments System Development Group, the International Financial Cooperation (IFC) in advancing the country’s payment reform agenda, and are eager to complete this round of consultation on the draft NPS Bill with major stakeholders and the public,” the statement adds.
If passed, it will be called the Payment System Act 2018.