Central Bank to regulate all money transfer services in Sri Lanka

The Central Bank is to regulate all money transfer services in Sri Lanka, the Central Bank of Sri Lanka (CBSL) said in a statement.

Currently, institutions providing money transfer services in Sri Lanka such as banks and non-bank financial institutions, are regulated by the Central Bank of Sri Lanka or other relevant authorities to ensure financial system stability.

However, some entities providing similar services operate outside the formal system, potentially disrupting the money transfer system and not being subject to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regulatory framework.

To address this, the Minister of Finance, Economic Stabilization, and National Policies issued the Money or Value Transfer Service (MVTS) Providers Regulations, No. 1 of 2024 dated April 20, 2024, under the provisions of the Payment and Settlement Systems Act, No. 28 of 2005.

Accordingly, effective from June 3, 2024, these regulations require all MVTS providers to be registered and be monitored, offering unregistered or unlicensed MVTS providers the opportunity to formalize their operations and engage in the money transfer business through formal channels, CBSL said.

As per these Regulations, a person shall engage in the business of or function as an MVTS Provider only under the authority and in accordance with the terms and conditions of a Certificate of Registration issued by CBSL. However, any person who is already engaged in or is eligible to engage in the business of or function as an MVTS Provider under any other Payments and Settlements Department licence, permit or authorization issued by CBSL, or any other Regulator or Government entity is exempted from the aforementioned regulation.

Further, existing MVTS Providers who are already providing services without any licence, permit or authorization issued by CBSL, or any other Regulator or Government entity shall apply for a Certificate of Registration from CBSL, within one year from the effective date of these Regulations, June 3, 2024. (Colombo Gazette)