BOT Notification No (1 September 2017)-check

Transcription

1 Unofficial Translation This translation is for the convenience of those unfamiliar with the Thai language Please refer to Thai text for the official version Notification of the Bank of Thailand No. FPG. 18/2559 Re: Regulations on Permission for Commercial Banks to Provide Electronic Money (e-money) Services 1. Rationale The Bank of Thailand is aware of the benefits of electronic money (e-money) services to the enhancement of efficiency of the payment system and convenience of financial transactions, while the services also help reduce the costs of merchants cash management. The Bank of Thailand Notification No. FPG. 26/2551 Re: Permission for Commercial Banks to Provide Electronic Money Services dated 3 August 2008 was thereby issued, requiring commercial banks intending to provide electronic money services to obtain prior approval from the Bank of Thailand. Whereas, formerly, only e-money denominated in Thai Baht currency for domestic use was allowed. In addition, commercial banks must establish risk management for e-money service and emphasize customer protection in order to develop credibility of the e-money services as well as to reduce risks and possible impact on the financial institution system, payment system and financial system which may arise from the e-money services. Currently, the use of electronic money services is extensive and growing, while the types of services are being diversified, such as virtual e-money. Furthermore, the Electronic Transactions Commission, by virtue of the power conferred by the law governing electronic payment service businesses, has issued the Notification of the Electronic Transactions Commission Re: Requirements, Procedures and Conditions for Undertaking Electronic Payment Service Businesses dated 11 April 2016 amending the guidelines on supervision of electronic payment services, including e-money services, to accommodate current customers demands and business conditions. The scope of e-money services is extended to allow issuing e-money denominated in foreign currency, while the service providers shall keep accounting record of advances (float) received from service users separately from other accounts. Additionally, registration of e-money is required to protect the service users in the event that the e-money is lost or stolen, etc. BOT Notification No (1 September 2017)-check

2 BOT Notification No (1 September 2017)-check 2 The Bank of Thailand thereby repeals the guidelines on supervision of e-money services under the aforementioned Notification and prescribes new guidelines on permission for commercial banks to provide e-money services, as detailed in this Notification. Commercial banks must provide e-money services within the scope and comply with the guidelines prescribed in the Notification of the Electronic Transactions Commission, as aforementioned as well as regulations further prescribed in this Notification, e.g. board of directors approval on e-money policy, float management, including reporting to the Bank of Thailand and notification to customers in the event of service disruption. 2. Statutory Power By virtue of Section 36 of the Financial Institution Business Act B.E (2008), the Bank of Thailand hereby issues the regulations on permission for commercial banks to provide e-money services to comply with. 3. Scope of Application This Notification shall apply to all commercial banks according to the law on financial institution business. 4. Content 4.1. The provisions of Clause of the Bank of Thailand Notification No. FPG. 26/2551 Re: Permission for Commercial Banks to Provide Electronic Money Services dated 3 August 2008 and Attachment 3 of that Notification (Guidelines on Supervision of Electronic Money Services) shall be repealed, and commercial banks shall comply with the guidelines on e-money services prescribed in this Notification Definition e-money means the electronic money according to the law governing electronic payment service businesses. Board of Directors means the board of directors of a locally registered bank or the executive board with relevant management authority of a foreign bank branch Scope of permission for e-money services The Bank of Thailand permits commercial banks to provide e-money services within the scope of business as prescribed in the law governing electronic payment service businesses, where commercial banks must obtain approval from the Bank of Thailand.

3 BOT Notification No (1 September 2017)-check 3 Additionally, commercial banks must either notify, register or obtain a license in accordance with the law governing electronic payment service businesses Guidelines on supervision of e-money services Commercial banks shall comply with the guidelines as prescribed in the Notification of the Electronic Transactions Commission Re: Requirements, Procedures and Conditions for Undertaking Electronic Payment Service Businesses, as well as the following regulations: (1) Commercial banks must establish a clear and written policy on e-money services, which is in line with their business strategies. The policy must be approved by the Board of Directors and must, at least, cover the types of e-money services, float management, internal control, management of risks from providing the services, business continuity management, and customer protection. Furthermore, the policy must be reviewed at least once a year and when there is any significant change to the e-money services as the policy should reflect changed business strategies. (2) Commercial banks must institute sufficiently efficient float management able to accommodate customer transactions and to reduce settlement risks. Furthermore, commercial banks must keep accounting records of the float separately from other accounts, and must clearly disclose as separate item on the financial statements or in the notes to financial statements. In this regard, the Bank of Thailand will closely monitor the volume of e-money in the system and may prescribe further requirements on float management as deemed necessary. (3) In case where commercial banks outsource the service or appoint an agent to provide e-money services, the commercial banks shall comply with the guidelines on outsourcing for financial institutions, guidelines on IT outsourcing for financial institutions, or guidelines on appointment of banking agents, as the case may be, as well as other related guidelines (if any) e-money services regulations Commercial banks shall obtain approval from the Bank of Thailand prior to commencing the services in the following cases: (1) Where commercial banks intend to provide e-money services;

4 BOT Notification No (1 September 2017)-check 4 (2) Where commercial banks intend to provide different types of e-money services from those previously approved by the Bank of Thailand; (3) Where commercial banks undertake material modification to the e-money service previously approved. The Bank of Thailand will finish its consideration of the application within 45 days from the date the request and related documents have been completely received. However, commercial banks can undertake the following cases without prior approval from the Bank of Thailand. (1) Where commercial banks intend to provide e-money services for purchasing certain goods or services as specified in advance from a single service provider which objective is to facilitate the service user without intending to gain profits from issuing cards which is exempt from prior notice requirement under the Bank of Thailand Notification issued under the law governing electronic payment service businesses; (2) Where commercial banks that have been approved by the Bank of Thailand to provide e-money services for purchasing certain goods and/or services as specified in advance from several service providers at service points of the same distribution and service system but, subsequently, wish to provide e-money services for purchasing certain goods or services as specified in advance from a single service provider; (3) Where commercial banks that have been approved by the Bank of Thailand to provide e-money services for purchasing certain goods and/or services as specified in advance from several service providers at unlimited service points of different distribution and service systems but, subsequently, wish to provide different types of e-money services from those previously approved by the Bank of Thailand Reporting to the Bank of Thailand In the event of temporary suspension of e-money services affecting customers on a wide scale, be it planned downtime or major incident, commercial banks shall comply with the Bank of Thailand Notification Re: Major Incidents Required to Report to the Bank of Thailand Customer Notification In the event of temporary suspension of e-money services affecting customers on a wide scale, commercial banks shall perform the following:

5 5 (1) In the event of planned downtime; commercial banks shall inform the service users 15 days in advance of the suspension through at least 2 channels, which may be in paper or electronic format, or by means of the publication in the newspapers or posted announcement in public area at the head office, branches or points of e-money services; (2) In the event of a major incident, commercial banks shall inform the service users promptly, no later than 24 hours from when the incident/problem occurs or is detected Compliance with related regulations and laws Commercial banks shall comply with other relevant regulations and laws, e.g. the law governing exchange control, law governing anti-money laundering, law governing combating the financing of terrorism, as well as the Bank of Thailand Notification No. FPG. 26/2551 Re: Permission for Commercial Banks to Provide Electronic Financial Services for relevant provisions until the Notification is repealed, revised or amended. 5. Transitional provision 5.1. Commercial banks that have been approved by the Bank of Thailand to provide e-money services before the effective date of this Notification shall be able to continue their services without obtaining further approval from the Bank of Thailand During the period that the Bank of Thailand Notification Re: Major Incidents Required to Report to the Bank of Thailand, according to Clause 4.6 of this Notification, is not yet effective, commercial banks shall report the incidents to the Information System Examination Department, Payment Systems Policy and Financial Technology Group, Bank of Thailand, as follows: (1) In the event of planned downtime; commercial banks shall submit a plan for that downtime, together with reasons and downtime period, to the Bank of Thailand 15 days in advance of the service suspension; (2) In the event of a major incident, such as system disruption, commercial banks shall inform the Bank of Thailand promptly, no later than 24 hours from when the incident/problem occurs or is detected. In addition, the commercial banks shall submit a summary report of that incident/problem, by specifying details of the problem, causes and impacts, resolution and recovery time, and measures to prevent the recurrence of that BOT Notification No (1 September 2017)-check

6 6 problem, to the Bank of Thailand within 15 days from the first day the e-money services are resumed. 6. Effective Date This Notification shall come into force as from the day following the dates of its publication in the Government Gazette. Announced on 28 th December 2016 Regulatory Policy Department Tel , Fax (Mr. Veerathai Santiprabhob) Governor Bank of Thailand Disclaimer: The Association of International Banks, its directors, members and employees take no responsibility, accept no liability from any use or misuse of the information in these pages and do not attest to the correctness of the translation, if any. This translation contains privileged information. It is intended for the named recipients only. No portion of this translation may be transmitted by any means without prior written permission from the Association of International Banks. All rights reserved. BOT Notification No (1 September 2017)-check