2024-05-09 01:10:09
New laws are in place to reduce risk and protect consumers in electronic currency transactions. Under this Act measures will be taken to protect the interests of customers in electronic currency transactions such as development, cash, way, e-wallet etc. A bill in this regard will be raised in the Parliament for approval in the current session of the National Assembly.
The Act is titled the ‘Electronic Currency Payment and Settlement System Bill 2024’. The Financial Institutions Department of the Ministry of Finance has enacted this Act.
According to the law, no person, institution or bank-company can participate in any payment system, manage payment system or provide payment service in electronic currency without the approval or license of Bangladesh Bank. Payment service rules should be impersonal, non-discriminatory and consistent; No provision may be included that impairs consumer rights.
It has been said that if an organization conducts business transactions in violation of regulations or gives false information or statements, the proposed law provides for a maximum three-year imprisonment or a maximum Tk 30 lakh fine or both.
If any company conducts such business after the cancellation of the license, in that case the provision of imprisonment for a maximum of five years and a fine of not more than 50 lakh rupees or both have been made. Apart from this, provision has been made to penalize financial penalty ranging from one lakh taka to maximum five lakh taka for obstructing the conduct of audit activities.
It has been said that to obtain approval or license, application should be made to Bangladesh Bank subject to filling prescribed forms, following procedures and paying fees. Within six months of the coming into effect of the law, the licensed institutions shall comply with the provisions of the law in all their activities, and the banking companies already operating payment services shall obtain the license within one year of the coming into effect of the law.
In this regard, an official of the Financial Institutions Department said that many types of transactions are currently taking place in digital mode. Internet and agent banking outside the main banks and financial institutions, electronic funds transfer, credit and debit cards including Bikash, cash, rocket, e-wallets of various banks, internet banking, electronic currency, electronic fund transfer, electronic presentation of checks, digital currency of the central bank, Tanked cheques, trust cum settlement accounts, government securities settlement system etc. Through these methods payment of money, receiving money and customer’s money needs are settled. And these methods are being used by banks, financial institutions, various financial institutes including agent banking. This law is being enacted to reduce the risk and protect the interest of the customer by supervising and controlling their activities.
Under this Act, banks or financial institutions interested in payment transactions outside of core banking services must obtain separate approval from Bangladesh Bank before providing payment services. In conducting business, banks or financial institutions have to follow the relevant provisions of Act No. 14 of the ‘Bank Companies Act 1991’ regarding capital, ownership and management.
Besides, any other institution or individual other than banks and financial institutions can be involved in the payment transaction business. However, in this case, the interested organization or person has to take license from Bangladesh Bank following the relevant regulations and the business operator has to reserve capital in the amount, rate and manner prescribed by Bangladesh Bank from time to time.
According to the bill, the payment service provider shall carry out all activities related to opening customer accounts, issuing electronic currency and executing transactions in electronic currency and management of trust and settlement accounts for the purpose of providing payment services.
The operator of the payment system can assist the customers in the payment process by any other method approved by Bangladesh Bank, including managing all activities related to the settlement of transactions between the participants in the payment system.
The Participant in the Payment System shall conduct activities related to the administration of the Settlement System, including participating in the Payment, Drainage and Settlement System on behalf of himself or the Customer.
Payment System Operator, Payment System Participant and Payment Service Provider shall manage the funds through trust and settlement accounts if they hold the service recipient’s money for settlement activities.
On the other hand, the restrictions on providing services include that no person, institution or company can issue or sell ‘advance paid documents’ without the approval of Bangladesh Bank under this Act and accept any type of investment, loan, deposit or deposit from the public. Cannot operate any online or offline platform where financial transactions originate.
According to the bill, the licensed institutions for providing payment system services will formulate and publish their own rules following the rules of Bangladesh Bank. The rules will cover liquidity, settlement, technical risk management, good governance, continuity of operations, emergency measures, dispute resolution, customer service and other related matters. Provided in this case that the rules shall be non-personal, non-discriminatory and consistent and shall not include any provision that impairs the rights of the consumer. The payment service operator can take outsourcing services from a third party under the policy of Bangladesh Bank or provide related payment services to the customer by appointing an agent.