BSP lauds Payments Systems Act
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 17 Dec 2018 16:24:51 +0000
The Bangko Sentral ng Pilipinas (BSP) on Monday lauded the enactment of the National Payment Systems Act (NPSA), describing the law as critical to the development of settlement networks and financial system stability and efficiency.
Also known as Republic Act 11127, the law was signed on October 30 by President Rodrigo Duterte and took effect last November 15.
The central bank said the landmark legislation “allows the Philippines to join other countries in Asean (Association of Southeast Asian Nations) and other parts of the world in the shared goal of promoting and maintaining a secure and reliable operation of payment systems.”
The law, it added, provides a comprehensive legal and regulatory framework that will support the twin objectives of maintaining a payment system needed to control systemic risk and providing an environment conducive to the sustainable economic growth.
“A payment system provides the channels through which funds are transferred among banks and other institutions to discharge payment obligations arising from economic and financial transactions across the entire economy,” the BSP continued.
Also, it noted that an efficient, secure and reliable payment system would reduce the cost of exchanging goods and services, and is an essential tool for the effective implementation of monetary policy and the smooth functioning of money and capital markets.
Bangko Sentral Governor Nestor Espenilla Jr. said “the NPSA will foster a level playing field for all participants as they will now be governed by a single overarching legal and regulatory framework.”
“This will bring about more competition, greater efficiency, and foster digital innovations for both banking and payments products and services,” he added.
Under NPSA, the central bank will oversee domestic payment systems and exercise supervisory and regulatory powers for the purpose of ensuring the stability and effectiveness of the monetary and financial system.
It will coordinate with other regulators and government agencies to avoid gaps, inefficiencies, duplications, and inconsistencies. This includes working with the Securities and Exchange Commission for the orderly discharge of obligations arising from securities transactions.
The Bangko Sentral also noted that the law gave it the authority to designate a new payment system if it determines that existing ones pose or have the potential to pose a systemic risk, or if the designation of one is necessary to protect the public interest.
It has also been given the power to require operators of designated payment systems to secure prior authority, and to accredit or require, when deemed necessary, a payment system management body.
All operators of payment systems as defined under the NPSA will have to register with the BSP within six months from the effectivity of the law.
Payments systems already existing on the day of the law’s effectivity will be given sufficient time to comply with the requirements of the NPSA.
The BSP said it would be issuing implementing rules and regulations, and provide guidance to entities covered by the new law.
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