BB regulations to secure payment system

The central bank has issued two regulations aiming to promote, regulate and ensure a secure and efficient payment system in Bangladesh through minimising operational risks, officials say.
The regulations - Bangladesh Payment and Settlement Systems Regulations-2014 and Regulations on Electronic Fund Transfer-2014 - will help establish a safe, sound and efficient payment system in Bangladesh.
 "We expect it will also help strengthen the financial inclusion programme through modernising payment system," a senior official of the Bangladesh Bank (BB) told the FE Thursday.
Under the new regulations, payment system operators (PSOs) and payment service providers (PSPs) will have to take licences from the Bangladesh Bank (BB) to run their businesses.
"The PSPs like bKash and post office shall retain electronic records of transactions for 12 years from the date of their completion", according to the regulations.
"Such records of transaction will help comply with the Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT) regime," the central banker explained.
The regulations will come into force with immediate effect and supersede the Bangladesh Payment and Settlement System Regulations, 2009.
The central bank will have the jurisdiction to grant PSO and PSP licences for operation of payment systems and payment services in Bangladesh.
The BB will also have the jurisdiction to authorise certain cross-border payment activities, such operations often affect payment systems in Bangladesh, according to the regulations.
The banks and non-banking financial institutions (NBFIs) maintaining accounts with the central bank for meeting cash reserve requirement (CRR) are not required to obtain a new licence as a payment service provider but they are required to comply with the instructions and reporting requirements set by the BB, and will be subject to oversight requirements for licensed entities under the regulations.
"They shall in any event be required to obtain a licence for the operation of Payment Systems and the provision of Payment Services," the BB noted.
Licensed PSOs and PSPs must meet the requirements under all relevant laws, comply with AML/CFT procedures, as well as regulations and guidelines prescribed for them by the BB, it added.