Sierra Leone Introduces New National Payment Systems Act
Promoting Efficiency, Stability, and Security in the Nation’s Payment Systems
The Government of Sierra Leone has introduced a new legislation aimed at promoting efficiency, stability, and security in the nation’s payment systems. The National Payment Systems Act, 2022, sets out to regulate and oversee the country’s payment systems, ensuring that financial transactions are conducted safely and efficiently.
Key Definitions
- Payment Transaction: A transaction involving the transfer of funds from one account to another.
- Real-Time Gross Settlement (RTGS): A payment system that enables immediate settlement of payments.
- Remittance Services: Services that facilitate the transfer of funds between individuals or businesses.
- Settlement Agent: An entity responsible for settling payments and securities.
Central Bank’s Powers
The Act grants the Central Bank powers to regulate and oversee the national payment system. The bank can: + Frame policies for continuous modernization of the system + License payment services providers + Determine general or individual conditions, standards, rules, and procedures for licensed entities + Act as a central counterparty to participants + Hold cash accounts for operators and participants + Extend intraday credit to entities operating in the payment systems + Cooperate with other public authorities, international organizations, and sectoral bodies
National Payment System Committee
The Act establishes a National Payment System Committee, comprising representatives from key institutions such as: + Commercial banks + Accountants + Discount houses + Community banks + Mobile money operators + Fintech associations
The committee will advise the Central Bank on matters related to the national payment system, including: + Operational and technical standards + Clearing and settlement of payments and securities + Other matters affecting payment services
Licensing Requirements
To operate a payment system or provide payment services in Sierra Leone, entities must obtain a license from the Central Bank. The Act sets out requirements for licensing, including: + Capital adequacy levels specified by the Central Bank + Proof of compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations + Submission of periodic financial statements
Conclusion
The National Payment Systems Act, 2022, is designed to promote a safe, efficient, and stable payment system in Sierra Leone, enabling individuals and businesses to conduct financial transactions with confidence.