CBK clarifies on guidelines for e-payment transactions
KUWAIT: Kuwait Central Bank (CBK) held a press conference yesterday at its premises to highlight the new guidelines that were issued recently on electronic payments. CBK Deputy Governor Yousef Al-Obaid said electronic transactions have increased rapidly during the last few years. “These are part of local and international transactions. They enable faster conclusion of contracts and agreements and bring the parties of these agreements closer by providing direct connection between them,” he said.
Earlier this week, CBK issued guidelines for all service providers including companies and institutions to register on its electronic payment system. According to this regulation, all service providers are required to regulate their e-payment transactions in line with established regulations. All e-pay methods are subject to the scrutiny of the CBK. The new instructions are part of the initiative to boost the banking sector.
About 140 people representing 70 institutions and companies including local banks and branches of foreign banks in Kuwait, exchange offices, telecommunication companies, and public institutions related to this issue attended the conference. “Kuwait is keen to remain updated in this field with all the developments happening around the globe. So we decided to exploit it for commercial transactions that are part of the development. This also requires supervision of these transactions and those who deal with them,” added Obaid.
Law no 20/2014 on electronic transactions vested supervision and control with the Central Bank. “CBK had contacted the banks to get their opinion on these regulations, as the CBK usually does before issuing any regulation that affects the economy in general and banks’ performance in particular. CBK also received the approval from the fatwa and legislation department for these regulations,” he added.
Anwar Al-Ghaith, Executive Director for Information Technology and Banking Operations at CBK, noted that the regulations are always modern and not conventional. “The CBK examined the latest developments on this issue in developed countries with the support of the International Monetary Fund (IMF) before approving it. CBK’s objective is to make payment operations in Kuwait safe and secure, in addition to offering more work opportunities in the local economy,” he explained.
These regulations will be in force within 12 months. “If the institutions do not apply them within the stipulated period, then they will be violating the law. The CBK has made the regulations clear and easily understandable. The regulations set in article 25 are divided into seven sections including payment methods, data protection, sanctions and other issues,” Ghaith said.
Waleed Al-Awadhi, Executive Director of Supervision Sector at CBK, stated that these regulations aimed to ensure security of the electronic payment system. “It also aims to limit the potential risks that may affect its safety and efficiency. It will also ensure financial stability through the supervision of all parties of these operations,” he pointed out.
The supervision starts from the beginning of listing at the registry. “Nobody can practice electronic payment without obtaining a license from the CBK and it has the right to stop the practice of any institution if it does not obtain a license. Banks will be listed automatically as service providers while other institutions will have to apply for registration,” explained Awadhi.