By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) has drafted the first circular for the implementing rules and regulations (IRR) of the National Payment Systems Act (NPSA) for a “safe, efficient and reliable” payment systems in the country, and has sought industry comments.
MB file photo.
The circular IRR for the NPSA (or Republic Act No. 11127) contains simplified procedures for the registration with the BSP of payment institutions such as banks, electronic money issuers (EMIs) and all other money service businesses or MSBs, which are already monitored by the central bank.
It laid down the initial phased-in implementation of the NPSA, which prioritizes the creation of a baseline inventory of all operators of payment systems (OPS), according to the BSP. This is required under Section 10 of the NPSA which provides that all OPS will have to register with the BSP. “This inventory will be used as inputs to the specific criteria for designating payment systems, as well as the oversight rules to be applied to such systems and the participants,” said the BSP.
The draft circular has made it possible for OPS and registered payments-related businesses to have a smooth transition period under the provisions of the new law.
“Considering that usage of payment systems is not necessarily limited to banks and nonbank financial institutions, the scope of the regulatory powers of the BSP are likewise expanded under the NPSA to cover non-financial institutions such as operators, their service providers, among others,” said the BSP.
The BSP also said it will ensure that existing MSBs as well as new ones, will have ease of doing business via simplified registration process and streamlined documentary requirements. In addition, the central bank said the draft circular provides “descriptive examples” of activities that will require BSP registration.
“Given that there could be institutions (banks, EMIs, MSBs) already registered/licensed by the BSP, which may also fall under the definition of an OPS under RA No. 11127 and in the draft circular, such institutions will only have to submit a duly accomplished application for registration,” said the BSP.
As the first comprehensive legal and regulatory framework governing the payment systems in the Philippines, the NPSA will “support the twin objectives of maintaining a payment system that is necessary to control systemic risk and providing an environment conducive to the sustainable growth of the economy,” stressed the BSP.
“Through a safe, efficient, and reliable payment system 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 cost of exchanging goods and services is reduced. It is likewise an essential tool for the effective implementation of monetary policy, and the smooth functioning of money and capital markets,” the BSP added.