What is a crucial payment system? How are the oversight activities of crucial payment systems regulated?
What is a critical payment system?
Pursuant to Clause 2, Article 3 of Circular 20/2018/TT-NHNN, a critical payment system is a payment system that plays a dominant role in meeting the payment needs of entities within the economy, has the potential to generate systemic risk, and meets at least one of the following criteria:
- It is the only payment system or holds a significant proportion of the total payment value compared to other payment systems of the same type; or- It processes high-value payment transactions; or- It is used to settle payments for other payment systems or for transactions in the financial market.
Accordingly, the critical payment systems stipulated in Circular 20/2018/TT-NHNN include:
- The National Interbank Electronic Payment System;- The foreign currency payment system (operated by Joint Stock Commercial Bank for Foreign Trade of Vietnam);- The securities transaction payment system;- The financial transaction clearing and switching system.
What is a critical payment system? How is the supervision of critical payment systems regulated?
How is the supervision of critical payment systems regulated?
Pursuant to Chapter II of Circular 20/2018/TT-NHNN through activities stipulated in Article 5 of Circular 20/2018/TT-NHNN, the supervisory unit shall supervise critical payment systems with the following contents:
(1) Monitoring the operation of critical payment systems through:
- Collecting documents, information, and data from the following sources:+ Reports as regulated by the current laws on reporting policies and statistics for credit institutions, branches of foreign banks;+ Operational data of the National Interbank Electronic Payment System as regulated in Appendix I issued with Circular 20/2018/TT-NHNN, collected and extracted from relevant information systems of the State Bank;+ Other reports from the operating organization as stipulated in Article 7 of Circular 20/2018/TT-NHNN;+ Evaluation reports of the National Interbank Electronic Payment System as per Appendix V issued with Circular 20/2018/TT-NHNN, conducted by the supervisory unit every three years;+ Tools, software for monitoring critical payment systems of the State Bank;+ Documents, information, and data collected through on-site inspections of the operating organization as stipulated in Article 6 of Circular 20/2018/TT-NHNN;+ Information related to critical payment systems reflected in the media;+ Information provided by other competent authorities;+ Feedback from participants in the critical payment system and customers using payment services;+ Other information sources to supervise critical payment systems;
- Comparing, cross-checking, and verifying the accuracy of data:+ Comparing and cross-checking collected documents, information, and data with historical data to detect unusual fluctuations;+ Comparing and cross-checking documents, information, data from different sources as stipulated in point a clause 1 Article 5 of Circular 20/2018/TT-NHNN to ensure consistency;+ Assessing the rationality of documents, information, data, and in case of detecting incomplete, erroneous, or inappropriate documents, information, data, requiring the operating organization to promptly explain and resend accurate information;
- Summarizing, analyzing collected documents, information, data, comparing, cross-checking, and verifying as stipulated in point a and point b clause 1 Article 5 of Circular 20/2018/TT-NHNN
(2) Evaluating critical payment systems
Based on the documents, information, and data collected as per (1), the supervisory unit shall evaluate each critical payment system and compile supervision reports to submit to the Governor of the State Bank.
- Quarterly, semi-annual, and annual periodic reports shall be prepared for the National Interbank Electronic Payment System.- Semi-annual and annual periodic reports shall be prepared for the foreign currency payment system, the securities transaction payment system, the financial transaction clearing and switching system.- Ad-hoc reports on arising risks and incidents of critical payment systems shall be prepared.
(3) Warning, Recommendations
In case the supervisory unit detects potential risks that could affect the safe and stable operation of the critical payment system or cause the operating organization to not comply with relevant laws concerning critical payment systems, the supervisory unit shall report and propose that the Governor of the State Bank issue warnings and recommendations to the operating organization.
Objectives of supervising critical payment systems
According to Article 4 of Circular 20/2018/TT-NHNN, the objectives are stipulated as follows:
- Ensuring the safety, stability, and efficiency of critical payment systems.- Ensuring compliance with laws related to critical payment systems.- Prompt detection and warning to the operating organization to minimize arising risks during the operation of critical payment systems.- Protecting the legitimate rights and interests of customers using payment services, and enhancing customer trust in payment services.
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