2. 3. 4. 5. 6. Attn : Please place graphic Benefits of using
Pre-paid/Stored Value Cards: 7. FATF definition ofMoney Laundering-
the processing ofcriminal proceeds to disguise their illegal origin
in order to legitimize the ill-gotten gains of crime. FATF,What is
money laundering?, Basic Facts About Money Laundering , at
http://www.fatf-gafi. org/MLaundering_en.htm. 8. Attn : Pls place
graphic Typically, Money-laundering is segmented into 3 stages: 9.
Attn : pls place graphic 10. 11. 12. 13. 14. 15. 16. Regulatory
Framework addressing Pre-paid risk in Singapore Electronic Money
Two categories of E-money in Singapore -Single Purpose &
Multiple Purpose Stored Value SPSVCs only to pay for goods/services
of issuer MPSVCs- to pay for goods/services of other merchants
MPSVFs who can issue
- The Banking Act (s.77A) allows only banks authorized by
Monetary Authority of Singapore to issue MPSVCs;
- Payment System (Oversight) Act 2006 (s.33) allows any
entity/person to issue MPSVCs with stored values below S$30
million;
- SPSVCs may be issued by any entity.
17. India: Regulatory Framework Regulatory Framework addressing
Pre-paid risk in India Pre-paid payment instruments Pre-paid
payment instruments facilitate purchase of goods and services
against the value stored on such instruments - smart cards,
magnetic cards, m-wallets TypesClosed system, Semi-closed system,
Semi-open system and Open system Who can issue Banks and NBFCs can
issue Open System Cards, subject to approval from RBI. Others are
allowed to issue other system cards other than Open System License
and Supervision Entities issuing closed-system pre-paid card are
exempted, subject to reporting requirements to RBI; All other
entities would require RBI authorization 18. Capital Requirements
Only Banks/NBFCs meeting regulatory Capital Adequacy Ratio are
allowed to issue all types of Pre-paid
InstrumentsKYC/AML/CFTKYC/AML/CFT rules applicable based on the
features of instruments and vulnerability of misuse Deployment of
Money collected Collected money should be held with the issuing
entities. Non-bank issuers (except those exempted) required to
maintain outstanding balance in escrow account with a scheduled
bank. Reloading of Cards Both banks and NBFCs may issue reloadable
instruments. Reloading Closed System Cards allowed at retail
agents. Bank issued SVCs can be reloaded at ATM & through
Internet banking. 19. Money Transfer Pre-paid payment instruments
can be used for transfer of funds online or using mobile phone
networks.KYC/AML/CFTKYC/AML/CFT rules applicable based on the
features of instruments and vulnerability of misuse Security and
Fraud PreventionAdequate information and data security systems, and
prevention and detection of frauds should be at place Complaints
and Redressal Effective mechanism for redressal of customer
complaints shall be in place 20. Regulatory Framework addressing
Pre-paid risk in Sri Lanka Main Legislation Payment and Settlement
System Act, 2005 Regulation Money, Payment, Clearing and Settlement
Providers Regulation No. 1 of 2007 Regulation empowers Central Bank
of Sri Lanka (CBSL) to supervise, regulate and monitor service
providers including entities offering money service or payment
systemDirection on Service Providers of Card Based Payment
Instruments made under Regulation No. 1 of 2007 21. Card Based
Payment Instrument A payment instrument or Payment card includes
-Credit Card, Charge card, ATM card, Debit Card, Stored Value Card
A physical or virtual Card-Based Payment Instrument acquired by
Cardholder by paying advance amount, and value of funds is
installed in card as stored value, presented in rupee or converted
into other units Prepaid Card A physical or virtual Prepaid card
issued to execute payment of an obligation/s incurred in single
type of economic transaction Single/Multi-purpose Stored Value Card
A non-bank institution registered by CBSL for Stored Value Card
business of single-purpose multi-merchant, multi-purpose
multi-merchant and non-merchant Specialized Stored Value Card 22.
Registration Non-bank entities are required to register at CBSL as
Specialized Stored Value Card Institution to issue Stored Value
Card Currency Stored Value Card used for transactions in Sri Lanka
are required to calculate units in rupees PriorNotification
Notification to CBSL required for giving advertisement or for cards
promotion Customer InformationFinancial Transactions Reporting Act
/ Anti Money laundering Act requires reporting of suspicious cash
transactions to CBSL and places KYC obligations on banks and
financial institution 23. Regulatory Framework addressing Pre-paid
risk in Bangladesh Applicable Laws Bangladesh Payment and
Settlement Systems Regulation, 2009; Money Laundering Act, 2002;
and Foreign Exchange Regulation Act, 1947 Regulating and
supervising of payment systems is operative in Bangladesh,
including cross border transactions Recognizes Payment Service
Providers (PSP) as new quasi financial entities and recognizes
issuance of E-money, electronic fund transfer (EFT), Pre-paid Card
For license PSPs may be required to maintain capital adequacy at
levels specified by the Bangladesh Bank [Reg.4(vii)]
Banks/Financial Institutionsmaintaining accounts with
BangladeshBank for meeting Cash Reserve Requirementare exempted
from obtaining license as PSP. Regulatory Scope 24. Proportionate
and risk based regulations Low risk prepaid products with no cash
redemptions may be exempted from license Conditions for
authorization should be pre-specified Fees should be designed
keeping in mind the poor, unbanked and underserved community With
regard to risk management, security and integrity - General
Guidelines should be in place to be followed by all to ensure best
practice Semi-closed/open products may be exempted, subject to
following a regular code of conduct Regulatory Approach:One Size
Does Not Fit All 25. AML Exchange of Information between FIUs
Information Exchange in a Rapid manner Proper International
Co-operation Framework Build a Comprehensive and Efficient Domestic
Capacity Ratification and Implementation of International
Conventions 26. 27.
