Regulation of financial transactions needed in Uganda

By; Charles Katabalwa

28^th November 2019

The State Planning Minister, David Bahati has emphasized the need to enact a law regulating all payment systems to ensure safety and efficient financials.

He was formally presenting the National Payment Systems bill 2019 to the Finance Committee of Parliament chaired by Rubanda East MP, Henry Musasizi, which is scrutinizing the proposed law.

The Bill seeks to provide for supervision and oversight of mobile money transactions. It provides for the protection of the payment and settlement systems against insolvency proceedings by providing for transfer orders finality, irrevocability and protection of collateral arrangements.

 “It provides for electronic money issuance and circulation. This deals with how issuance of mobile money will be licensed, supervised and regulated. The Bill also provides on how to deal with dormant accounts held with electronic money issuers where after a period of 10 years, the funds on the dormant accounts will be transferred to the Consolidated Fund,” said Bahati.

The bill also provides for the licensing criteria, procedure and the regulatory power of the Central Bank concerning imposition of norms, standards on operators of payment systems and the powers to obtain information and take enforcement actions to ensure compliance.

It also seeks to ensure principles of consumer protection guided by transparency, accountability, data protection, full disclosure of the information relating to services, confidentiality and dispute resolution mechanism.

According to Bahati, once enacted, the law will promote public confidence through increased certainty and transparency.  The Committee Chairperson, Henry Musasizi, said the Finance Ministry will be required to explain further how the gaps in the mobile money system will be closed by the proposed law.

Agago Woman MP, Judith Franca said that the 10 year period for money on dormant accounts to be transferred to the Consolidated Funds seems long.

The Pian County MP, Achia Remigio also asked how the Finance Ministry will guarantee the amount of money that will be on dormant accounts.