There is a need for the major stakeholders to align with some form of regulatory approach or framework which would provide a basis for assessing risks, and to implement regulations  2  BIS Review 162/2009  that are proportionate to the risks identified. In this Forum, some of the key elements of such a regulatory framework will be dealt with, such as Know Your Customer, compliance with Anti-money Laundering regulations, Consumer Protection and achieving greater levels of system interoperability amongst service providers. As such, branchless banking will require an inter-disciplinary approach given the different types of expertise needed to drive this important agenda. The third area of policy concern I would like to touch on relates to the issue of accountability with cross-sector regulatory requirements. There must be clarity over the accountability for the integrity of transactions, security of information transmitted, adherence to a consistent set of regulations and proper maintenance of the system. And it is important to note that higher standards of control will also result in higher costs to the service providers. Cross-sector policy issues must be resolved, and clear accountability with respect to the operations of the system must be established. Systems of governance to engage with different legislative requirements, from capital requirements to anti-money laundering regulations, must be in place. Players need to have the requisite skills and knowledge to address issues promptly with different stakeholders, such as customs, immigration, police and international agencies like Interpol.

This involves transparency on the part of service providers; and  iv. Customers should not be faced with unreasonable post sale barriers imposed by banks and financial institutions or service providers, forcing them to purchase supplementary products and services. 4.3.5 Ensure fair treatment to customers: Treating customers fairly throughout the life of a payment product, as well as at service points, is an essential theme that should be focused on by all stakeholders. In this regard, it is necessary to establish principles-based regulations on payment related activities rather than compliance or rules-based regulations. The regulations should relate to the payments mode or the payments product life cycle and the payments culture in each country. The principles and related reviews should seek to accomplish the provision of solutions to significant and persistent problems in the distribution of products in the retail segment of the payment services, and to build financial capability, i.e. equipping customers with the skills and knowledge needed to achieve a fair deal. 4.3.6 Established customer protection and rights, and legal framework: The retail customers and their rights should be protected in the legislation. Several countries have passed separate laws to achieve this. In the Payments and Settlements Act, the Central Bank of Sri Lanka has included a separate section on customer protection. In 2005, the Reserve Bank of India established regulation and supervision within its Payment and Settlement Act. It is imperative that customer rights are looked after as many financial institutions and service providers have been accused of customer exploitation.