Bank of Settlements: Covid - 19 blessings for digital payments and a curse for all-round financing The Bank for International Settlements described th

Bank of Settlements: Covid - 19 blessings for digital payments and a curse for all-round financing

The Bank for International Settlements described the footprint of the Covid-19 epidemic on the international banking system as a "blessing" for digital payments and a "curse" for inclusive financing, saying that financial authorities around the world have moved to encourage the use of digital payments in response to the epidemic, while global financing has witnessed significant weakness. .
Comprehensive financing (or financial inclusion) refers to the provision of basic financial and banking services at a specific low cost to consumers who face difficulties and thereby excluding them from traditional services. Therefore, financial inclusion is the counterpart of "bank exclusion" directly related to social exclusion.
The bank said from its headquarters in Basel that the value of financial technology institutions is estimated at more than $ 127 billion, and it is one of the fastest growing sectors in the world, as it employs thousands of people and generates new sources of income for economies around the world. In 2020, the importance of financial technology was exacerbated by the increasing use of digital payments as a means of avoiding the spread of Covid-19. However, the economic burden of Covid-19 to some financial technology and payment providers was stark, due to diminished transaction volumes as economic output slowed.
For emerging markets and developing economies, levels of financial inclusion have fallen 10 percent, and financial technology and digital payments companies are also at risk.
The bank says that technology brings financial services to many and raises the value of banks and their profits, and without them, banks will have only limited access to customers and services or no absolute access.
For his part, Coved-19 provided an unexpected opportunity to take advantage of more digital channels to reach groups without digital payment.
In his survey of measures by member countries of the bank to mitigate the economic impact of Covid-19, the Bank for International Settlements found that sub-Saharan African economies - where levels of financial inclusion are among the lowest regions in the world - undertook most of the policy reform work in response to the epidemic.
44 sub-Saharan African institutions made a total of 34 interventions in banking procedures in response to the requirements of Coffid-19. In the area of ​​digital finance, Sub-Saharan Africa carried out the vast majority of policy interventions, followed by the Middle East, North Africa and Latin America.
Measures to facilitate the use of digital financing during quarantine focused on increasing financial inclusion and ensuring that communities continue to access payment channels and instruments, and to a lesser extent, to reduce any potential infection by dealing with cash.
Among the examples cited by the bank regarding the procedures of emerging market banks and developing economies to use digital financing during the quarantine and ensuring that local communities continue to access channels and payment tools: the designation of large-scale networks - thousands of sites operating daily - to deposit and withdraw cash as a basic service, and in some cases Banks and payment service providers have been designated primary service providers.
On the loan front, the authorities in India have allocated $ 22 billion in interest-free loans to the vulnerable and poor segments of society for the duration of the epidemic. In Pakistan, authorities have imposed tax exemptions on service providers, with the aim of motivating agents to continue serving customers in rural communities.
In some countries, measures have been implemented to reduce or waive bank fees, and the Kenyan Central Bank has required mobile money providers to provide free services for low-value transactions. Transfer facilitation fees between mobile money wallets and bank accounts have also been waived. These measures were extended until the end of 2021.
Other countries have implemented payment system policies that cover a wide range of transactions, including one-to-one transactions, and inter-government and business transactions.
Exemption from fees extends to the financial institutions participating in the payment system. In Russia, for example, the central bank waived fees for sending money from one bank account to another by prompt payment. In Pakistan, the government bank waived all fees for electronic transfers as well as fees for making large-value payments. Banks have canceled fees for all digital payment channels to encourage the general population to use them.
Other countries have implemented more relaxed procedures such as "Know your customer" (KYC) to facilitate remote entry and use of digital channels. But the Bank for International Settlements said, "Know your customer" regulations, and if necessary to maintain the integrity of the financial system, they may have unintended consequences.
According to the bank, 40 percent of adults in low-income countries still lack formal identification papers, which makes it difficult for them to access financial services. However, some banks have gone on to implement a risk-based approach that has allowed individuals who are considered to be low risk to obtain basic forms of financial services that are not limited to identification. But the majority is still outside the financial system.
Quarantine and cash-related measures have forced many central banks to reassess their requirements in order to obtain financial information. Some authorities have eased the "know your customer" account opening measures to allow transaction accounts to be opened remotely.
Governments have defined a series of measures to "facilitate large payments and encourage digital forms of payment" for a period of three months. One of the measures provided for allowing all mobile phone subscribers to use their mobile phone registration data to apply for the minimum mobile money account. This procedure allowed all mobile phone subscribers to open a "mobile money account".
And the compound bank authorized
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