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NATIONAL PAYMENT SYSTEMS ACT (CHAPTER 24:23)

CHAPTER 24:23

NATIONAL PAYMENT SYSTEMS ACT

Act 21/2001; S.I. 262/2006.

ARRANGEMENT OF SECTIONS

PART I

PRELIMINARY Section

  1. Short title.

PART II

PAYMENT AND SETTLEMENTSYSTEMS

  1. Recognition of payment systems.
  2. Approval of amendments to constitution and rules of recognised payment system.
  3. Constitution and rules of recognised payment system to be open to inspection.
  4. Withdrawal of recognition from payment system.
  5. Establishment and operation of settlement system.
  6. Discharge of settlement obligations within settlement system.
  7. Provision of information to Reserve Bank.
  8. Control of undesirable conduct in regard to recognised payment system. PART III

FINALITY OF SETTLEMENTS WITHIN RECOGNISEDPAYMENT SYSTEM ORSETTLEMENT SYSTEM

  1. Finality of payments and transfers made within settlement system.
  2. Payments and transfers within settlement system not subject to interdict or stay.

PART IV

WINDING UP, JUDICIALMANAGEMENT OR CURATORSHIP OF PARTICIPANTSINRECOGNISED PAYMENT SYSTEM

  1. Reserve Bank to be notified of winding up or judicial management of participant in recognised payment system.
  2. Winding up or judicial management of participant in recognised payment system not to affect finality of prior settlements.
  3. Rules, etc., of recognised payment system binding on liquidator, judicial manager or curator.
  4. Priority of certain instruments, on winding up of participant in recognised payment system.

PART V

GENERAL

  1. Prohibition against unrecognised payment systems.
  2. Prohibition against payment intermediation.
  3. Settlement of disputes arising out of recognised payment system or settlement system.
  4. Exercise of functions by Reserve Bank.
  5. Preservation of secrecy.
  6. Use of confidential information for personal gain.
  7. Review of Act.
  8. Reserve Bank to report on recognised payment systems to Minister.
  9. Transitional provision: existing payment systems.

AN ACT to provide for the recognition, operation, regulation and supervision of systems for the clearing of payment instructions between financial institutions, for the netting or other settlement of obligations arising from such clearing and the discharge of indebtedness arising from such netting or settlement; to make provision for the finality of payments and settlements made in accordance with such systems; and to provide for matters connected with or incidental to the foregoing.

[Date of commencement : 16th November, 2001.]

PART I

PRELIMINARY

                       I     Short title

This Act may be cited as the National Payment Systems Act [Chapter 24:23].

[Short title amended by s.i. 262 of 2006]

                       2    Interpretation

In this Act—

“clearing” means the exchange by financial institutions of payment instructions;

“financial institution” means—

  • a banking institution registered in terms of the Banking Act [Chapter 24:20]; or
  • any other institution which lawfully engages in a banking activity specified in subsection (1) of section 7 of the Banking Act [Chapter 24:20], if the institution is recognised by the Reserve Bank as a financial institution for the purposes of this Act;

“management body”, in relation to a recognised payment system, means a body which represents participants in the system and organises and manages their participation in the system;

“Minister” means the Minister of Finance and Economic Development or any other Minister to whom the President may, from time to time, assign the administration of this Act;

“netting” means the determination of—

  • the net payment obligations between two or more financial institutions as a result of the clearing of payment instructions through a payment clearing house; or
  • the net settlement obligations between two or more participants in a settlement system;

“payment clearing house” means an arrangement between two or more financial institutions governing the clearing of payment instructions between them;

“payment instruction” means an instruction to a financial institution to transfer funds or make a payment, and includes—

  • a cheque; and
  • a bank draft; and
  • a banker’s acceptance; and
  • an instruction made by electronic means;

“payment obligation” means any form of indebtedness that is owed by one financial institution to another as a result of the clearing of one or more payment instructions;

“recognised payment system” means a system recognised by the Reserve Bank in terms of subsection (1) of section three;

“Reserve Bank”, subject to section twenty means the Reserve Bank of Zimbabwe referred to in section 4 of the Reserve Bank of Zimbabwe Act [Chapter 22:15];

“settlement obligation” means any f4rm of indebtedness that is owed by one participant in a recognised payment system to another such participant and which is to be discharged through a settlement system;

“settlement system” means a system established and operated by the Reserve Bank in terms of section seven for the discharge of settlement obligations between participants in the system;

“systemic risk” means a risk that a failure, for whatever reason, by one or more participants in a recognised payment system or a settlement system to meet their payment obligations or their settlement obligations may result in any or all of the other participants in the system being unable to meet their respective payment or settlement obligations.

PART II

PAYMENT AND SETTLEMENTSYSTEMS

                       3    Recognition of payment systems

(1) Subject to this section, the Reserve Bank may recognise a system that has any of the following objects— (a) the clearing of payment instructions between financial institutions that are participants in the system;

  • the settling of obligations arising from the clearing of payment instructions referred to in paragraph (a), whether through—
    • the netting of the obligations or
    • set-off; or-
    • the individual settlement of each credit transfer or payment instruction
  • the discharge, through a settlement system established by the Reserve Bank in terms of section seven of any indebtedness between participants in the system which arises from the settling of obligations referred to in paragraph (b); together with all or any of the following objects, to the extent that they are incidental to or connected with an object specified in paragraph (a), (b) or(c)—
    • establishing a payment clearing house for the clearing of payment instructions between all or any of the participants in the system and for the provision of services that are incidental to such clearing;
    • providing a forum for the, consideration of matters of policy and mutual interest concerning participants in the system;
    • acting as a medium of communication, on behalf of its participants, with the Government, the Reserve Bank, the Registrar of Banks and other persons and authorities;
    • dealing with other matters of interest to its participants and fostering co-operation between them.

(2) The Reserve Bank may in terms of subsection (1) recognise different payment systems— (a) in respect of different classes of financial institutions; or

  • in respect of different areas of Zimbabwe; or
  • for the clearing of different classes of payment instructions; or (d) for the netting or settlement of different classes of obligations.

(3) The Reserve Bank shall not recognise a payment system in terms of subsection (1) unless it is satisfied that— (a) only financial institutions and the Reserve Bank are permitted to become participants in the system; and

  • the system fairly represents the interests of all financial institutions that re or will become participants in the system; and
  • the Reserve Bank will be able adequately to monitor and regulate the system and the activities of its participants in order to ensure compliance with this Act and the Banking Act [Chapter 24:20]; and
  • the constitution and any rules governing the system are fair, equitable and transparent and make adequate provision for—
    • admitting financial institutions into the system as participants and regulating and terminating their participation; and
    • controlling its participants use of payment clearance or settlement systems or operations; and
    • appointing a management body or committee, representative of the participants, to organise and manage the system and the participants’ participation in it; and.
    • appointing any person as a system operator within the system in order to provide clearing processing services to or on behalf of participants; and
    • criteria according to which a participant may be authorised to introduce any person to provide payment services.

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