Jul 17, 2017

NPP won't be given to private sector - Amunugama Featured

Regulation of the National Payment Platform (NPP) will not be handed over to the private sector, which will only provide technical support, says special projects minister Dr. Sarath Amunugama.

He answered questions posed to him by journalists with regard to the NPP, during a function in Kandy yesterday (16)

Amunugama said the NPP would be an administering and supervising board in a future cashless society where transactions would be carried out using the electronic payment methods such as credit cards.

It will be regulated by the finance ministry or a separate institution that would be established, but that no final decision has been taken so far.

The Central Bank too, has a right, parliament will take the final decision, said the minister.

Meanwhile, newsfirst.lk has revealed an attempt to swindle public money through the NPP.

On November 10, 2016, then Finance Minister Ravi Karunanayake proposed in his budget speech to introduce a NPP.

With a NPP, all government organisations will be able to allow businesses and citizens to make online payment on real-time for services offered.

The creator of the NPP will have access to information of all users including institutions, businesses and citizens of the country.

According to the budget proposal, ICTA would implement the NPP.

On September 9, 2015, almost a year before the budget proposal, speaking at a national forum, CEO of ICTA Muhunthan Canagey revealed that a NPP was in the making.

He said, twelve companies had shown interest in the project, and three local private companies were selected for it.

In this case, then Finance Minister Ravi Karunanayake informed Parliament about NPP after three companies had been selected to undertake the project.

Cabinet approval was given for the NPP on 12 July 2016.

A case was filed with the Supreme Court seeking an order to quash the decision to implement and launch the NPP through the budget proposal with private firms.

The case claimed it was against the law of the country and would be taken up again on July 20.

A document prepared by Total Pay Private Limited notes that ICTA had given it rights for the advisorial role in the NPP.

To register with the NPP, a user must submit all details in to the system.

Therefore, a user will have to disclose all details from the NIC to bank accounts to the system that is operated by the private company.

System by LankaClear already in place

This attempt is being carried out while a successful system linking the Central Bank, state and private banks, by the name of ‘LankaClear’ is in place.

A private company is brought into the picture at a time when the groundwork is already laid to move LankaClear system under the complete supervision of the Central Bank of Sri Lanka.

The Central Bank is vested with the responsibility of regulating the transactions that involve public funds.

Central Bank should be the regulatory authority

The Central Bank should be the regulatory authority of a system like this, where major financial transactions will be carried out.

“The Central Bank has a responsibility in terms of the act, to regulate them. Any payment system”, said its governor Dr. Indrajit Coomaraswamy.

The law pertaining to payment systems is very clearly mentioned in the Payment and Settlement Systems Act no. 28 of 2005.

It says that the Central Bank shall be the authority responsible for the preparation of a plan for a national payment system.

The company short listing to develop this system however, has been done by the ICTA.

The prospectus of one of the companies short listed, Total Pay says they have been awarded the “right to operate as a Digital Instruction Provider (DIP) to the NPP by the ICTA.

According to the prospectus, Total Pay as a DIP can carry out user executed transactions by transmitting instructions to the bank via the NPP.

The Central Bank has taken measures to join all commercial banks through an automated system for custom data, which is already being used for Customs clearance activities.

The bank in a letter on 11 October 2016 to all commercial banks CEOs informed that the monetary board has sanctioned the system by LankaClear that would be in place through the NPP from November.

Just three days earlier, the then finance minister Ravi Karunanayake sent a different instruction to the CEOs that ICTA has prepared a NPP that would be in place from 01 November that year, and asked them to acquire the required software and other infrastructure.

He also gave Cangay’s telephone number for them to obtain further instructions.

Related articles:

Public money swindling through a National Payment Platform?

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