By Shabiya Ali Ahlam
In a move to promote a level playing field in the local banking and financial landscape, the Central Bank of Sri Lanka (CBSL) has taken a step forward in regulating the tariff structure of the widely used Sri Lanka Interbank Payment System (SLIPS).
Licenced banks and financial institutions were instructed that the maximum fee that can be charged from a customer for effecting a fund transfer through the SLIPS shall not exceed Rs.50 per transaction.
The directive came into effect on September 1, 2015.
Mirror Business learns that the Central Bank took the leap in regulating the electronic payment infrastructure as a number of banks and financial institutions were imposing high fees on customers for the service.
“Initially the Central Bank did not think it was necessary to impose upper caps as we thought the market would give reasonable tariff for customers. However, when we looked deeply into the matter we found it was not the case. There was a substantial deviation, which pushed us to regulate the tariff structure,” said Central Bank Director Payments and Settlements R.A.S.M. Dayarathna in a brief interview with Mirror Business.
She added that the tariff was imposed to not only promote electronic payment by offering cost-effective banking and payment systems to the general practice but also to encourage fair market practices and maintain a standard norm in the industry.
The SLIPS, which is an electronic system that processes payment orders to facilitate money transactions, was introduced by the CBSL in 1993 as an off-line Interbank Payment System. In 2002, the system came under the wing of financial infrastructure provider LankaClear when the regulator divested its operations.
The objectives of the SLIPS are to establish a uniform and common electronic retail payment system and to promote payment system safety and efficiency while promoting cooperation among all the SLIPS participants in the evolution of the country’s retail payment systems.
The SLIPS was upgraded to an online Interbank Payment System by LCPL in September 2010 to facilitate settlement of transactions on the same business day.