Bank of Ghana says to make national payment systems safe, smooth

The Bank of Ghana (BoG) has developed a framework to make the country’s payment systems safe and smooth.

The central bank says it has taken keen interest in the safety, reliability and efficiency of the payment system.

In a policy statement on national payment systems oversight issued at the end of December 2013, the BoG said its task is to ensure that the public, businesses and the government machinery can make payments in a safe and efficient manner.

The Bank noted that payment systems can also involve significant exposures and risks, as well as be a channel for the transmission of disturbances from one part of the economy or financial system to another.

According to the Payment Systems Act, 2003 (Act 662), the BoG has been authorized to “establish, operate, promote, designate and supervise payments, funds transfer, clearing and settlement systems” in the interest of the public. To enable the BoG to effectively perform its oversight function, its new framework has four main broad lines – Objectives of payment systems oversight; Risks in payment and settlement systems; the scope of payment system oversight; and BoG’s approach to oversight activities.

According to the policy statement on the payment oversight, the Bank said it shall apply “the twenty-four ‘Principles for Financial Market Infrastructures’ (April 2012) issued by the Committee on Payment and Settlement systems of the Bank for International Settlement (BIS) in collaboration with the Technical Committee of the International Organization of Securities Commissions (IOSCO)”.

“These principles”, the policy statement added “will be applied to all Financial Market Infrastructure (FMIs) operating in the country. The FMIs are payment systems of systemic importance such as the Real Time Gross Settlement (RTGS), National Switch, the Cheque Codeline Clearing with Truncation, Automated Clearing House, the Central Securities Depository, Securities Settlement Systems and mobile money transfer systems. These systems operating in the country are expected to comply with the applicable principles.”

The BoG indicated that it will “expand the scope of its oversight as it deems fit to ensure a high level of consumer protection and economic security to all users of Ghana’s payment systems”.

The BoG said the oversight function will be carried out by the National Payment Systems Oversight Office of the Banking Department of the Bank.

By Ekow Quandzie