ariff ali : presentation on the national payment systems bill 2020 presentation by mr ariff ali, governor of the reserve bank of fiji, to the parliamentary standing committee on justice, law and human rights on the national payment systems bill 2020, 22 january 2021. * * * salutation honourable chairperson ; deputy chairperson ; and members of the parliamentary standing committee on justice, law and human rights. a very good morning to you all. please allow me to firstly extend my appreciation to the committee for this opportunity to present the national payment systems ( nps ) bill and hopefully respond to any related queries or clarifications that you may have. introduction honourable chair and members, for several years now the reserve bank of fiji ( rbf ) has been working to reform fiji ’ s payment system in alignment with international best practises. the reform requires both a supportive and forward - looking payment system legislation that will provide an enabling and guiding framework to create a transparent and level playing field and support our move towards a less - cash or cash - reduced society with innovative digital payment solutions. this bill promotes interoperability, enhanced connectivity, the protection of stakeholders and ultimately aims to reduce costs to consumers. the absence of such a framework could potentially allow unregulated and unaccountable operators to enter and operate payment systems within the country, which could threaten the safety of our consumers and the stability of our financial system. the nps bill not only offers fiji this protection but encourages innovation and the development of payment solutions that will encourage commerce, industry and economic growth. honourable members, i wish to provide context to this reform by firstly defining what a payment and national payment system is. what is a national payment system? at the most basic level, a payment system is defined as any system used to settle financial transactions through the transfer of monetary value. at the aggregate and macro level, the national payment system constitutes the complete ecosystem relating to the initiation and settlement of financial transactions in the country. it refers to the entire matrix of institutional and infrastructure arrangements, including systems for the payment, settlement and clearing of transactions. the bank of international settlements, an international financial institution and payments standard - setting body notes that a national payment system forms an integral part of an economy ’ s financial system and comprises a number of distinct components including payment instruments, infrastructure, financial institutions, market arrangements and the supporting legal environment. as i have alluded to earlier, the objective of a payments systems is to connect economic actors ( individuals, governments

including government, our multilateral development partners : the world bank group, the international finance corporation and the commonwealth secretariat, and domestic stakeholders including the banking and financial industry players. the national payments system bill honourable members, the national payment systems bill 2020 is the legal framework which provides the umbrella legislation for all payment systems operating wholly and partially in fiji. the bill, which is aligned to international best practices and provides protection for all stakeholders including consumers, strengthens the regulatory framework of fiji ’ s payment systems by covering all aspects in a transparent, consistent manner. other key benefits of the bill are : vesting clear powers with the reserve bank to oversee, regulate and supervise payment systems in fiji, including non - bank and non - financial institutions providing payment services. this is vital to not only ensure the safety of the funds of all users but also maintain confidence in these systems and fiji ’ s financial system as a whole. providing legal certainty around the finality of payments and protecting all aspects of the payment system and its users. the bill offers protection against the insolvency of either the system operator or its participants and extends coverage to all activities that are associated with the sending, receiving and processing of payment orders, transfers of money, the issuance and management of payment instruments, payment, clearing & settlement systems and service providers operating wholly or partially in fiji. in fiji ’ s debt securities market, all government and statutory body securities such as bonds, treasury bills and promissory notes are currently issued in physical certificate form. the bill allows for dematerialisation of these securities i. e. converting paper - based securities to electronic form which will significantly impact the timeliness and efficiency of their trading, support the development and also enhance the liquidity of the securities financial markets in fiji. the bill also allows for the setting up of a central securities depository or csd in fiji which will modernise the infrastructure for debt security registries, depositories and settlement and essentially make related transactions for government and the private sector safer, faster and more convenient. the introduction of a central securities depository honours fiji ’ s commitment to the london stock exchange of dematerialising the fijian government green bond by 2024. motivations and benefits of the reform honourable members, the national payment systems bill is a step towards modernising our national payments system. therefore please allow me to highlight the compelling reasons motivating our efforts around the reform. despite the notable developments in fiji ’ s payments landscape over the years, the