After wide consultations on the National Payment Bill 2018, the Bank of Uganda is optimistic that Uganda will have a National Payment system law next year, which is more modern, efficient and flexible to players in the financial services and the general public.
The central bank believes that a national payment system is one of the principal components of a country’s monetary and financial system.
Similarly, actors in the financial subsector say it is through the national payment system that money is transferred between buyers and sellers in commercial and financial transactions. If done well, the national payment system can reduce transaction costs and expand the opportunities for commercial and financial transactions in an economy.
The Bank of Uganda says the national payment system is central to the effective implementation of monetary policy using money market transactions to influence overall financial and economic activity. In addition, it forecasts that developments in the payment system can affect the speed and predictability of the turnover of monetary balances, which may influence the overall demand for money in the economy.
Addressing a validation workshop on the National Payment Systems (NPS) Bill at Imperial Royal Hotel on Monday, director payment system department Bank of Uganda, Mr Mackay Aomu, said the central bank has finished doing wide consultation on the National Payment System Bill and included the concerns of all those involved in payments system in Uganda.
“This has been our final consultation to incorporate any issue that has not been included in the final draft. By mid-January 2019, the draft bill will have reached the Ministry of Finance, Planning and Economic Development,” he said.
“We expect this whole process to be completed in the first quarter of 2019 for approval by ministry of Justice and Constitutional Affairs. Our anticipation is that we will have a National Payment System law in place in 2019 so that we can commence licensing the operators and service providers of a payment system and issuers of payment instruments once the Bill has been passed by parliament,” he said.
Mr Aomu explained that the development of a safe and efficient national payment system has relevance for the monetary policy, financial stability and overall economic development interests of a central bank and the general public in the areas of convenience payments.