2022-04-20 | CBE13.1

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CBE Regulation Book 13.1 - Controls For Conducting Electronic Banking Operations And Issuing Means Of Payment For Electronic Money

The Central Bank of Egypt mandates that all banks must obtain prior approval from the Supervisory Authority to conduct electronic banking operations or issue electronic payment means, including debit cards, stored-value cards, and electronic cash. Banks are required to implement comprehensive risk management frameworks covering operational, reputational, legal, and other risks, specifically enforcing strict security controls such as authentication, privacy protection, and non-repudiation. The regulation establishes specific transitional deadlines for existing credit card holders to adopt SMS verification and for new smart card issuances by 2014, and defines detailed responsibilities for both banks and customers to ensure secure transactions via electronic networks.

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Chapter One: Controls for Conducting Electronic Banking Operations and Issuing Means of Payment for Electronic Money

Introduction:

The Central Bank of Egypt, as the monetary authority and the regulator of the banking sector, has issued this regulation to govern electronic banking operations and the issuance of means of payment for electronic money. This regulation aims to protect the interests of depositors and customers, ensure the safety and soundness of the banking system, and maintain the stability of the financial system.

The Central Bank of Egypt has issued this regulation to establish a comprehensive framework for electronic banking operations and the issuance of electronic money payment means. It seeks to mitigate risks associated with these operations, protect customers, and ensure the integrity and security of the banking system. The regulation applies to all banks operating in Egypt and defines the conditions, procedures, and controls for conducting electronic banking and issuing electronic payment instruments.

First: Electronic Banking Operations

1. Definition of Electronic Banking Operations:

Electronic banking operations are defined as any banking operations conducted by banks through electronic networks, excluding operations conducted at bank branches. These operations include:

  1. Operations conducted through ATMs (Automated Teller Machines) as per the Central Bank of Egypt Circular No. 10 dated 10/1/2002 (amended by Circular No. 28 dated 28/1/2002).
  2. Operations conducted through electronic channels by banks authorized by the Central Bank of Egypt.
  3. Operations conducted by banks through electronic channels for services such as fund transfers, bill payments, and other services approved by the Central Bank of Egypt.
  4. Operations conducted by banks through electronic channels for services such as account inquiries, balance checks, and other services approved by the Central Bank of Egypt.

The Central Bank of Egypt has issued this regulation to govern electronic banking operations and the issuance of electronic money payment means. It aims to protect the interests of depositors and customers, ensure the safety and soundness of the banking system, and maintain the stability of the financial system.

The Central Bank of Egypt has issued this regulation to establish a comprehensive framework for electronic banking operations and the issuance of electronic money payment means. It seeks to mitigate risks associated with these operations, protect customers, and ensure the integrity and security of the banking system. The regulation applies to all banks operating in Egypt and defines the conditions, procedures, and controls for conducting electronic banking and issuing electronic payment instruments.

Second: Reasons Requiring Banks to Obtain a License to Provide Electronic Banking Operations

  1. The need to protect the interests of depositors and customers and ensure the safety and soundness of the banking system.
  2. The need to mitigate risks associated with electronic banking operations, such as operational, reputational, legal, and other risks.
  3. The need to ensure the integrity and security of the banking system and maintain the stability of the financial system.

Third: Conditions for Banks to Obtain a License to Provide Electronic Banking Operations

  1. The bank must have a sound financial position and meet the capital adequacy requirements set by the Central Bank of Egypt.
  2. The bank must have a robust risk management framework in place, including policies and procedures for identifying, measuring, monitoring, and controlling risks associated with electronic banking operations.
  3. The bank must have adequate IT infrastructure and security systems to protect customer data and ensure the integrity of electronic transactions.
  4. The bank must have qualified personnel to manage and operate electronic banking systems.
  5. The bank must have a business plan for electronic banking operations that outlines the services to be offered, the target market, and the expected revenue streams.
  6. The bank must have a contingency plan to ensure business continuity in case of system failures or other disruptions.
  7. The bank must have a complaint resolution mechanism to address customer complaints related to electronic banking operations.

The Central Bank of Egypt has issued this regulation to govern electronic banking operations and the issuance of electronic money payment means. It aims to protect the interests of depositors and customers, ensure the safety and soundness of the banking system, and maintain the stability of the financial system.

The Central Bank of Egypt has issued this regulation to establish a comprehensive framework for electronic banking operations and the issuance of electronic money payment means. It seeks to mitigate risks associated with these operations, protect customers, and ensure the integrity and security of the banking system. The regulation applies to all banks operating in Egypt and defines the conditions, procedures, and controls for conducting electronic banking and issuing electronic payment instruments.

Second: Issuing Means of Payment for Electronic Money

1. Definition of Issuing Means of Payment for Electronic Money:

The issuance of means of payment for electronic money is defined as:

  1. Issuing stored-value cards or smart cards, whether pre-paid or post-paid, which allow the holder to make payments for goods and services using electronic means.
  2. Issuing electronic cash, which is a form of electronic money stored on an electronic device, such as a personal computer or a mobile phone, and used to make payments for goods and services.

The Central Bank of Egypt has issued this regulation to govern electronic banking operations and the issuance of electronic money payment means. It aims to protect the interests of depositors and customers, ensure the safety and soundness of the banking system, and maintain the stability of the financial system.

The Central Bank of Egypt has issued this regulation to establish a comprehensive framework for electronic banking operations and the issuance of electronic money payment means. It seeks to mitigate risks associated with these operations, protect customers, and ensure the integrity and security of the banking system. The regulation applies to all banks operating in Egypt and defines the conditions, procedures, and controls for conducting electronic banking and issuing electronic payment instruments.

Types of Electronic Payment Means:

  1. Debit Cards: These cards are linked to the holder's bank account and allow the holder to make payments for goods and services using electronic means. The funds are deducted from the holder's account immediately upon transaction.

    • Electronic Cash (EC): The funds or value is stored on an electronic device as the personal computer of the consumer which is loaded using specialized software. EC is used to make small payments through a transfer of value to the merchants' electronic device.
  2. Credit Cards: These cards allow the holder to make payments for goods and services using electronic means. The funds are advanced by the bank and the holder is required to repay the amount plus interest and fees within a specified period. Credit cards can be used at point-of-sale terminals, automatic teller machines, and other electronic devices.

The Central Bank of Egypt has issued this regulation to govern electronic banking operations and the issuance of electronic money payment means. It aims to protect the interests of depositors and customers, ensure the safety and soundness of the banking system, and maintain the stability of the financial system.

The Central Bank of Egypt has issued this regulation to establish a comprehensive framework for electronic banking operations and the issuance of electronic money payment means. It seeks to mitigate risks associated with these operations, protect customers, and ensure the integrity and security of the banking system. The regulation applies to all banks operating in Egypt and defines the conditions, procedures, and controls for conducting electronic banking and issuing electronic payment instruments.

Transitional Provisions for Credit Cards:

  1. First: Existing credit card holders must activate SMS verification for transactions.
  2. Second: New smart card issuances must comply with the new regulations by 2014.

Second: Reasons Requiring Banks to Obtain a License to Issue Means of Payment for Electronic Money

The Central Bank of Egypt has issued this regulation to govern electronic banking operations and the issuance of electronic money payment means. It aims to protect the interests of depositors and customers, ensure the safety and soundness of the banking system, and maintain the stability of the financial system.

The Central Bank of Egypt has issued this regulation to establish a comprehensive framework for electronic banking operations and the issuance of electronic money payment means. It seeks to mitigate risks associated with these operations, protect customers, and ensure the integrity and security of the banking system. The regulation applies to all banks operating in Egypt and defines the conditions, procedures, and controls for conducting electronic banking and issuing electronic payment instruments.

Third: Conditions for Banks to Obtain a License to Issue Means of Payment for Electronic Money

  1. The bank must have a sound financial position and meet the capital adequacy requirements set by the Central Bank of Egypt.
  2. The bank must have a robust risk management framework in place, including policies and procedures for identifying, measuring, monitoring, and controlling risks associated with issuing means of payment for electronic money.
  3. The bank must have adequate IT infrastructure and security systems to protect customer data and ensure the integrity of electronic transactions.
  4. The bank must have qualified personnel to manage and operate electronic payment systems.
  5. The bank must have a business plan for issuing means of payment for electronic money that outlines the services to be offered, the target market, and the expected revenue streams.
  6. The bank must have a contingency plan to ensure business continuity in case of system failures or other disruptions.
  7. The bank must have a complaint resolution mechanism to address customer complaints related to issuing means of payment for electronic money.

The Central Bank of Egypt has issued this regulation to govern electronic banking operations and the issuance of electronic money payment means. It aims to protect the interests of depositors and customers, ensure the safety and soundness of the banking system, and maintain the stability of the financial system.

The Central Bank of Egypt has issued this regulation to establish a comprehensive framework for electronic banking operations and the issuance of electronic money payment means. It seeks to mitigate risks associated with these operations, protect customers, and ensure the integrity and security of the banking system. The regulation applies to all banks operating in Egypt and defines the conditions, procedures, and controls for conducting electronic banking and issuing electronic payment instruments.

Fourth: Conditions for Issuing Electronic Payment Means

All banks operating in the Arab Republic of Egypt are required to obtain approval from the Central Bank of Egypt, represented by the Supervisory Authority, and supervision in order to conduct any transactions with companies that provide electronic payment services.

Banks must obtain prior approval from the Central Bank of Egypt to provide these services and to contract with the chosen company, even if the company has already obtained prior approval from the Central Bank of Egypt.

The concept of electronic payment services includes the following:

  1. Systems for issuing payment cards.
  2. Systems for processing transactions and clearing.
  3. Systems for issuing electronic money.
  4. Systems for transferring funds between customers and merchants.
  5. Systems for transferring funds between customers and merchants via electronic payment means.
  6. Issuing electronic payment means for goods and services.
  7. Processing transactions for goods and services.

Third: Data Related to Electronic Banking Operations and Issuing Means of Payment for Electronic Money

Banks are required to maintain records of all electronic banking operations and the issuance of means of payment for electronic money. These records must be kept for a period of at least five years from the date of the transaction.

Banks are required to report to the Central Bank of Egypt on a regular basis regarding their electronic banking operations and the issuance of means of payment for electronic money. The reports must include information on the number of transactions, the volume of transactions, the types of transactions, and the risks associated with these operations.

The Central Bank of Egypt has issued this regulation to govern electronic banking operations and the issuance of electronic money payment means. It aims to protect the interests of depositors and customers, ensure the safety and soundness of the banking system, and maintain the stability of the financial system.

The Central Bank of Egypt has issued this regulation to establish a comprehensive framework for electronic banking operations and the issuance of electronic money payment means. It seeks to mitigate risks associated with these operations, protect customers, and ensure the integrity and security of the banking system. The regulation applies to all banks operating in Egypt and defines the conditions, procedures, and controls for conducting electronic banking and issuing electronic payment instruments.

Fourth: Risk Management Principles for Electronic Banking Operations

First: Risks of Electronic Banking Operations

Banks conducting electronic banking operations must identify, measure, monitor, and control the risks associated with these operations. The risks include:

  1. Operational Risk.
  2. Reputational Risk.
  3. Legal Risk.
  4. Other Risks, such as credit risk, market risk, and liquidity risk.

1. Operational Risk:

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. This includes:

a) Inadequate Security Systems: Unauthorized access to the bank's systems or data.

b) Inadequate System Design, Implementation, or Maintenance: System failures, downtime, or errors.

c) Misuse of Customer Services: Fraudulent activities by customers or employees.

2. Reputational Risk:

Reputational risk is the risk of loss resulting from damage to the bank's reputation. This can result from negative publicity, customer complaints, or regulatory actions.

3. Legal Risk:

Legal risk is the risk of loss resulting from failure to comply with laws, regulations, or contractual obligations. This can result from lawsuits, fines, or penalties.

4. Other Risks:

Other risks include credit risk, market risk, and liquidity risk. These risks are similar to those associated with traditional banking operations.

Second: Risk Management Principles

Banks must implement a comprehensive risk management framework that includes:

1. Risk Assessment:

Banks must identify and assess the risks associated with electronic banking operations. This includes:

a) Identifying the risks.

b) Measuring the risks.

c) Monitoring the risks.

2. Risk Control:

Banks must implement controls to mitigate the risks associated with electronic banking operations. This includes:

a) Implementing security measures and policies.

Security policies and procedures should target:

  1. Authentication and identification.
  2. Protecting customer data and privacy.
  3. Preventing fraud and unauthorized access.
  4. Ensuring non-repudiation.

Banks should also consider:

  1. Implementing access controls to prevent unauthorized access to systems and data.
  2. Monitoring system performance and security.
  3. Implementing backup and recovery procedures.
  4. Training employees on security best practices.

3. Risk Monitoring:

Banks must monitor the risks associated with electronic banking operations on an ongoing basis. This includes:

a) Conducting regular system tests and audits.

b) Conducting internal and external audits.

Advisory Responsibilities for Banks When Providing Services via Electronic Communication Networks

  1. Banks must ensure the security of their systems and data.
  2. Banks must implement risk management policies and procedures.
  3. Banks must provide adequate training to their employees on security best practices.
  4. Banks must have a contingency plan to ensure business continuity in case of system failures or other disruptions.
  5. Banks must report to the Central Bank of Egypt on a regular basis regarding their electronic banking operations and the issuance of means of payment for electronic money.
  6. Banks must have a complaint resolution mechanism to address customer complaints related to electronic banking operations.
  7. Banks must cooperate with law enforcement agencies in case of fraud or other criminal activities.

Advisory Responsibilities for Customers When Receiving Services via Electronic Communication Networks

  1. Customers must protect their passwords and PINs.
  2. Customers must not share their passwords or PINs with others.
  3. Customers must report any suspicious activities to the bank immediately.
  4. Customers must use secure devices and networks to access electronic banking services.
  5. Customers must be aware of the risks associated with electronic banking and take steps to mitigate these risks.
  6. Customers must keep their contact information up to date with the bank.
  7. Customers must review their account statements regularly.
  8. Customers must report any unauthorized transactions to the bank immediately.
  9. Customers must be aware of their rights and responsibilities when using electronic banking services.

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