Regulatory Alerts2011-04-07
Regulation on Payment Systems 2011
The Maldives Monetary Authority issued the Regulation on Payment Systems 2011 to implement provisions of the Central Bank of Maldives Act regarding the operation and oversight of payment systems. The regulation defines key terms such as gross settlement systems and clearing houses, and establishes system rules for their operation. It specifically mandates the use of truncated checks and electronic images for interbank clearing, outlining procedures for fund transfers, non-payment notifications, and the handling of original checks in cases of insufficient funds.
Regulation on Payment Systems 2011
First Chapter Preliminary
Article 1 Purpose This Regulation is issued under Article 65 of the Central Bank of Maldives Act (Law No. 24/2010) to implement the matters specified in sub-clause (c) of Article 36, Article 37 (a), sub-clause (4) of Article 65, Article 93, and sub-clause (14) of Article 98.
Article 2 Title This Regulation shall be known as the "Regulation on Payment Systems 2011".
Article 3 Scope of Application This Regulation shall apply throughout the territory of the Maldives.
Article 4 Commencement This Regulation shall come into force from 7 April 2011.
Second Chapter Approval of Payment Systems and Protection of Payment Systems
Article 5 Gross Settlement Systems and Automated Clearing Houses "Automated Clearing Houses" refers to Automated Clearing Houses and Switches established for the purpose of Article 93 of the Central Bank of Maldives Act.
Article 6 Netting "Netting" refers to net orders defined in the System Rules of Automated Clearing Houses and Switches for the purpose of sub-clause (14) of Article 98 of the Central Bank of Maldives Act.
Article 7 System Rules The operation of Gross Settlement Systems, Automated Clearing Houses, and Switches shall be conducted in accordance with the System Rules defined by the Maldives Monetary Authority.
Third Chapter Check Transactions
Article 8 Truncated Checks Instead of submitting the original check to another bank for payment, a truncated check may be submitted. For the purposes of this Chapter, "Truncated Check" refers to the image or electronic payment information of a check.
Article 9 Legal Status of Truncated Checks A truncated check submitted as an original for certification or other purposes shall be considered equivalent to the original check in the manner in which the check is certified.
Article 10 Electronic Submission Submitting an electronic submission under Article 8 of this Regulation shall be considered as submitting the original check for the purpose of clearing the check.
Article 11 Use of Original Check for Fund Transfer The original check shall not be used for any other purpose after transferring funds for a truncated check.
Article 12 Use of Original Check in Case of Non-Payment
(a) In the event that payment is not made for a truncated check submitted for payment due to lack of funds or other reasons, the drawer may request the bank holding the check to return the original check. The drawer shall send the original check to the bank holding it for return. Additionally, the drawee bank shall record the non-payment notices in the records of the respective party.
(b) The drawee bank shall record the image of the submitted check or the truncated check in the records of the respective party.
(c) In cases where the original check is not returned to the drawer, the truncated check along with the non-payment notice shall be considered as evidence of the non-payment certificate. Furthermore, the truncated check shall be regarded as the original.
(d)