By: Staff Writer
January 14, Colombo (LNW): Maintaining a stable and efficient payment system is essential for ensuring a robust financial system. To this end, the Central Bank of Sri Lanka has launched a comprehensive three-year plan to modernize the country’s payment landscape, with a focus on enhancing legislation, infrastructure, and public trust in digital payments, Central Bank Governor Nandalala Weerasinghe said.
Key elements of the plan include revising the Payment and Settlement Systems Act and updating subsidiary regulations, such as the Guidelines on Minimum Compliance Standards for Payment-Related Mobile Applications, by 2025 to accommodate the rapid growth of retail digital payments, he disclosed. .
In 2024, the Central Bank implemented a new Real-Time Gross Settlement (RTGS) system compliant with ISO 20022 standards, which will soon extend to cross-border transactions.
Efforts are underway to expand the Common Electronic Fund Transfer Switch (CEFTS), targeting broader access, especially for government payments.
Additionally, the Government Digital Payment Platform (GDPP) will be operationalized in 2025, enabling real-time payments to government institutions without digitalized databases, CB Governor disclosed. . .
The Central Bank also aims to strengthen the access regime for interbank payment systems and adjust the licensing framework for payment services. From January 2025, the Merchant Discount Rate (MDR) for LANKAQR has been restored to 1%, incentivizing financial institutions and FinTechs to encourage wider adoption.
Recognizing the risks associated with digital payments, the Central Bank has prioritized safeguarding public trust by monitoring fraud patterns and enhancing security.
A circular to protect customer accounts from unauthorized access via payment apps will take effect in March 2025. Additionally, nationwide awareness campaigns will educate the public on digital payment services, their benefits, and associated security measures to mitigate fraud and scams.
These initiatives are set to strengthen Sri Lanka’s payment ecosystem, promoting innovation, security, and trust in digital transactions while driving the country’s financial modernization.
Strengthening Financial Consumer Protection is one of the key priorities as the Central Bank aims to foster a more transparent and consumer-centric sustainable financial system.
A series of strategic initiatives are planned for 2025 and beyond in this regardin order to enhance the trust of financial consumers in the financial system.
The scope of market conduct supervision is expected to be broadened by increasing the frequency and depth of on-site examinations of market conduct.This aims to ensure greater compliance with Financial Consumer Protection
Regulations and to address emerging financial consumer risks. In order to address critical financial consumer risks and dissatisfaction and to set clear guidelines to prevent unfair practices and ensure compliance, Directions focusing on issues such as fees and charges, penalties, and the imposition of interest on future obligations are to be issued.
