(30 May 201, Addis Ababa, Capital)--Tomorrow will be a historical transition for the country’s financial sector when the Ethiopia Automated Transfer System (EATS) commences after extensive preparations.
Getahun Nana, Vice Governor of NBE, told Capital that the EATS will be officially introduced early this week in all banks of the country. At the official launching ceremony banks and other stakeholders who will participate in the EATS signed a system rule agreement that help to implement the new system.
“We need not wait to ratify the new system proclamation by the parliament to commence the EATS. But it will help us to enforce other institutions who are not part of the signing ceremony,” the Vice Governor explained.
The modern national payment system consumed 9 million dollars in investments. Many international firms were involved in efforts to automate the NBE system.
Many local financial institutions also invested a huge amount of capital to automate their system in order to link it with the NBE system. “Almost all banks have finalized their automation,” Getahun said. He explained that the networking between banks and their branches is occurring. “Banks have agreed to finalize branches’ networking quickly,” he added.
“NBE has developed its staff capacity to effectively carry out the bank’s key functions of regulating and supervising financial institutions, undertaking economic research and formulating and implementing sound monetary policy,” Teklewold Atnafu governor of NBE said.
The governor said that the national payment system council regulation and oversight directive have also been drafted. “It will be issued after the enactment of the proclamation (the new bill was tabled by the parliament early this month to be ratified within a few weeks),” he said.
The new payment system provides the basic infrastructure for inter-bank large volume money transfer and interface with the retail payment system.
The National Bank says the new law would ensure safety, security and efficiency of a payment system that will be using the latest electronic transfer devises such as already in operation Automated Teller Machines (ATM), Mobile Banking, Point of Sales, Internet and various payment cards.
The upcoming modern system would replace the costly and risky cash and cheque based transactions that defined the local financial sector for decades.
The integrated payment system will consist of two parallel lines of transactions. One is a real time transfer dedicated only for large value fund transfer such huge sum paid by the federal government or intra-bank financial transactions.
Retail fund transfer systems such paying a telephone fee can be made instantly but confirming the transaction done by NBE could take up to a day. If the payer and receiver are using the same financial transaction it could be faster.
Though the large sum transfer is usually tasked for central banks, the private sector could handle the retail transfer once it proves competent and strong. Every financial organization will need to be accredited and monitored by the NBE which itself will play serve as a bank handling transactions for the federal government.
The new system is trying to help the banks improve service and increase capital. In collaboration with the implementation of national payment system the UK based Maxwell Stamp firm has undertaken the capital market study, which will be implemented in the near future by NBE.
The Maxwell study includes design strategy and action plans which follow by phase to phase implementation approach; first legal and institutional framework, then government securities and the final will be stock market.
The new system will create a modern national payment system. It was officially launched on Friday May 27, at the Hilton Hotel, in the presence of officials from National Bank of Ethiopia (NBE), financial institutions, the World Bank and other stakeholders.
Getahun Nana, Vice Governor of NBE, told Capital that the EATS will be officially introduced early this week in all banks of the country. At the official launching ceremony banks and other stakeholders who will participate in the EATS signed a system rule agreement that help to implement the new system.
“We need not wait to ratify the new system proclamation by the parliament to commence the EATS. But it will help us to enforce other institutions who are not part of the signing ceremony,” the Vice Governor explained.
The modern national payment system consumed 9 million dollars in investments. Many international firms were involved in efforts to automate the NBE system.
Many local financial institutions also invested a huge amount of capital to automate their system in order to link it with the NBE system. “Almost all banks have finalized their automation,” Getahun said. He explained that the networking between banks and their branches is occurring. “Banks have agreed to finalize branches’ networking quickly,” he added.
“NBE has developed its staff capacity to effectively carry out the bank’s key functions of regulating and supervising financial institutions, undertaking economic research and formulating and implementing sound monetary policy,” Teklewold Atnafu governor of NBE said.
The governor said that the national payment system council regulation and oversight directive have also been drafted. “It will be issued after the enactment of the proclamation (the new bill was tabled by the parliament early this month to be ratified within a few weeks),” he said.
The new payment system provides the basic infrastructure for inter-bank large volume money transfer and interface with the retail payment system.
The National Bank says the new law would ensure safety, security and efficiency of a payment system that will be using the latest electronic transfer devises such as already in operation Automated Teller Machines (ATM), Mobile Banking, Point of Sales, Internet and various payment cards.
The upcoming modern system would replace the costly and risky cash and cheque based transactions that defined the local financial sector for decades.
Though practice of using different kinds of payment cards for purchases dates back to the 19th century in the developed world, it would be the first time to be applied here as now facilitated by the new law, funded by the World Bank.
The integrated payment system will consist of two parallel lines of transactions. One is a real time transfer dedicated only for large value fund transfer such huge sum paid by the federal government or intra-bank financial transactions.
Retail fund transfer systems such paying a telephone fee can be made instantly but confirming the transaction done by NBE could take up to a day. If the payer and receiver are using the same financial transaction it could be faster.
Though the large sum transfer is usually tasked for central banks, the private sector could handle the retail transfer once it proves competent and strong. Every financial organization will need to be accredited and monitored by the NBE which itself will play serve as a bank handling transactions for the federal government.
The new system is trying to help the banks improve service and increase capital. In collaboration with the implementation of national payment system the UK based Maxwell Stamp firm has undertaken the capital market study, which will be implemented in the near future by NBE.
The Maxwell study includes design strategy and action plans which follow by phase to phase implementation approach; first legal and institutional framework, then government securities and the final will be stock market.
The study included legal and regulatory framework for primary and secondary markets, and institutional frameworks for establishment of a securities exchange commission.
Source: Capital
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