Payment and Settlement System Bill to protect customers’ interest placed in JS

The "Payment and Settlement System Bill, 2024" was placed in Parliament yesterday to bring banks as well as non-bank payment service providers under the legal framework to protect the interests of customers.

State Minister for Finance Ministry Waseqa Ayesha Khan, in favour of Finance Minister AH Mahmud Ali, placed the Bill in Parliament and it was sent to the Parliamentary Standing Committee on the Ministry of Finance for further examination. The Committee was asked to submit its report within 15 days.

According to the proposed law, any banking company can not participate in any payment system, operate payment systems or provide payment services in electronic currency without obtaining approval from Bangladesh Bank.

Under the proposed law, no person, institution or company can issue or buy and sell 'Prepaid Payment Instrument' without obtaining approval from Bangladesh Bank.

Without approval from Bangladesh Bank, any type of investment taking, lending, deposit or financial transaction through online or offline is prohibited.

Violation of these shall be offences and shall be liable to imprisonment for a term not exceeding 5 (five) years or Tk50 lakh as fine or both.

If any person is required by or under any provision of this Bill or In pursuance of his purpose, in any statement, report or other document or information called for or filed, wilfully and knowingly furnishes false information or statement on any material matter, or, wilfully and knowingly, omits to furnish information or any statement on such matter; If so, it will be a crime, and for that that person will be punished with imprisonment not exceeding 3 (three) years or fine not exceeding Tk30 lakhs or both.

If any person contravenes any other provision of this proposed law, or contravenes any order or direction made or any condition imposed or any provision of any rule or regulation made thereunder, such contravention shall be an offence and shall be liable to imprisonment for a term not exceeding 3 (three) years shall be punished with imprisonment, or with a fine not exceeding Tk30 lakh, or with both.

 Under this proposed law, all crimes will be cognizable, non-bailable and non-compoundable.

According to the stated objective of the bill, there is no existing law regarding payment and settlement system in Bangladesh.

All payment and settlement systems are being managed under "Bangladesh Payment and Settlement Systems Regulations, 2014 and Regulations on Electronic Fund Transfer, 2014" by Bangladesh Bank According to Article 7A(e) of the current Bangladesh Bank Order, 1972.

As there is no separate law in this regard, the banks are conducting activities by contracting with Bangladesh Bank under "The Contract Act, 1872" in order to comply with the regulations described for participating in various electronic transaction systems.

In addition, there is currently no law regulating the payment activities of non-bank financial institutions.