| 2010-09-06 |  |
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National payment system
National payment system have witness important developments in the recent years. They became heavily dependent on more sophisticated applications, a matter that allowed for the development of electronic smart means that contribute in diversification, acceleration and accuracy of various financial and banking services .
In the context of the Central Bank of Libya (CBL) trend to ward increasing the benefits of the large developments of information technologies and improving the banking activity environment, the CBL and commercial banks jointly started in September 04, 2004 implementing an ambitious program for technological developments in the area of information technology in the National Payment System. This program was preceded by approving a plan, set by a committee of experts in the banking activities. This plan’s objective is to formulate a strategy that ensures efficiency, effectiveness and safety for the developments of a national payment system to contribute in the development of financial and other economic sectors.
To execute this program, contracts with international companies were concluded to undertake the following projects:-
1.Real-Time Gross Settlement (RTGS):
This system electronically, irrevocably, settles the accounts of banks and public institutions with the CBL at every working day-end. This settlement will be required of all practicing banks and financial institutions.
2. Automated Clearing House (ACH):
Relates to the settlement of all transactions resulting of banks transactions with their clients, before going to Real-Time Gross Settlement for final settlement.
3. Automated Checks Processing (ACP):
This system relates to electronic inter-banks clearing of checks according to scanning technique, paper files and net-transaction posting to the clearing Automated Clearing House System in order to easily an safely settle the values of inter-bank checks.
4.Automated Teller Machines (ATM)/Points of Sales (POS):
This system provides a fundamental environment for the national automated teller distributor that provides access to all customers’ accounts with practicing banks and executes cash drawing transactions through automated teller machines by national and international networks. It also enables businessmen, their clients and companies that provide these services to accomplish the payments for transaction charges electronically using points of sales, in addition to the execution of all financial generally accepted international electronic transactions.
5.Core Banking System :
This system aims to develop technologies and techniques for banking activities of national banks in a way that qualify them to benefit mostly of the huge technologies provided by the project of National Payment System, and to strengthen the competitiveness with international banks. This system is being implemented over two stages, one for the CBL and the other for commercial banks participating in the project, using a technique that provides the applications while ensuring the acceptance of new participants in the system as necessary.
These systems will be interlinked and linked with commercial banks with various communication means such as optic fibers, centimeteric waves, satellites, wireless net, digital circuits and other communication means. The systems will be provided with coding and protection software in order to ensure safe and protected structure for data transmission between banks, the currently-under-construction data centers and all electronic financial services channels.
Banks are being prepared, to work with National Payments System, though intensified training programs aimed at qualifying national professionals capable to mange and function all parts of the project. Three data centers will be established according to the state of the art. These centers will ensure online functioning of national banks all the time and in all circumstances. The appropriate networking of the main data center, auxiliary and emergency centers will allow for their automatic alteration when necessary to avoid any interruption whatsoever the reasons. It will also ensure the flow of services at any time of the weekdays. The project is expected to be complete in mid-2007.
To make the system more effective, the Article no.(5) of the Law no.(1) of the year 2005, regarding banks, states that one of the capacities of the CBL is to supervise the National Payment System, including in the interbank clearing transactions of banks subject to the provisions of this law, and established the regulations governing it.
To ensure the success of the system, a new technological system was developed in order to develop the quality of services and to use sophisticated electronic techniques for the banking activity, through:
1.Developing an electronic banking system and the underlying communication infrastructure.
2. Preparation and qualification of human resources to function, maintain and reinforce these systems.
3. Updating the banking activities in accordance to these systems.
4. Updating laws and regulations with which banking institutions are working to reflect the effects of technological developments, and to allow for the electronic transactions.
5. Developing the control structures to be based on examination and auditing techniques through the system, rather than on circulars and resolutions, and directly monitor the banking sensitive operations., and to create the required data centers to tele-control risks.
The successful implementation of this project not only ensure handling the technical deficiencies, rather it provides banks with potentials to provide international quality banking services. The Real-Time Gross Settlement system will also contribute in interbank telegraphic transfers, and the execution of electronic cash orders between the members of system, in addition to the settlement of checks clearing. It also provides banks with control over their accounts. The training and qualification programs it entails will surely also contribute in providing human resources needed to function and support the application associated with these programs. It will also reinforce the CBL’s capabilities to control banking operations risks and maintain the financial stability. The instruments of monetary policy will be more effective in controlling money supply and directing the credit. The banking sector will be more capable and efficient in intermediation between saving resources and employment opportunities. Consequently, contributing, to the employment and economic growth.
