Money or Value Transfer Service providers to be regulated by CB

All Money or Value Transfer Service (MVTS) providers are required to be registered with the Central Bank from June 3 and will be monitored, the financial sector regulator said.

Accordingly, the Central Bank is offering unregistered or unlicensed MVTS providers the opportunity to formalise their operations and engage in the money transfer business through formal channels.

The effort is tolled out to ensure financial system stability as some entities providing money transfer services operate outside the formal system, potentially disrupting the money transfer system. Such entities are being subject to the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regulatory framework. 

For the purpose of these regulations, MVTS is defined as “financial services that involve the acceptance of cash, cheques, other monetary instruments or other stores of value and the payment of a corresponding sum in cash or other forms to a beneficiary by means of communication, message, transfer, or through a clearing network to which the registered MVTS provider belongs, the CBSL said in a statement.

Such transactions may involve one or more intermediaries and a final payment to a third party, and may be from place to place, within, to or from Sri Lanka or any other country. 

As per these regulations, a person shall engage in the business of or function as a 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 license, permit or authorisation 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 license, permit or authorisation 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. 

Key requirements to function as MVTS provider 

Shall be a company registered under the Companies Act, No. 7 of 2007 having an unimpaired capital of at least Rupees Twenty Million (20 mn) or such other amount determined by CBSL. A company limited by guarantee, an offshore company or an overseas company within the meaning of the Companies Act, No. 7 of 2007 is not eligible for registration under these regulations. 

Exclusively carry out businesses and activities of an MVTS provider. 

Maintain/operate a system or well-defined mechanism for providing MVTS.