Presentation on theme: "The development of the payment system in Bulgaria and SEPA preparation"— Presentation transcript:
1The development of the payment system in Bulgaria and SEPA preparation bnbThe development of the payment system in Bulgaria and SEPA preparationDimitar Kostov Deputy Governor Bulgarian National Bank
2Legal framework:- Law on the Bulgarian National Bank;- Law on Fund Transfers, Electronic Payment Instruments and Payment systems;- Regulations of the Bulgarian National Bank- Other related legislation (securities, bankruptcy, etc.)
3Law on the Bulgarian National Bank Art.2(4) The Bulgarian National Bank shall assist in establishing and functioning of efficient payment systems and shall oversee them.Art.40(1) For the purpose of facilitating non-cash payments, the Bulgarian National Bank may organize and operate payment systems and clearing offices, as well as issue ordinances providing for the establishment and operation of such systems and offices.
4LFTEPIPS (Law on payments) stipulates: - rights and obligations of providers and users of payment services and electronic payment instruments;- information requirements related to payments;- requirement for establishing and functioning of payment systems- payments oversight- payments related out-of-court dispute settlement
5General overview of payment and securities settlement systems in Bulgaria: Large value (RTGS) payment system – RINGS;Low value (net settlement) system – BISERA;Card system – BORICA;Government securities settlement system – GSSSCorporate securities settlement system - CDAD
7Large value (RTGS) payment system – RINGS In operation since 2 June 2003Settles systemically important payments in BGN on gross basis in real timepayments between CBs and between BNB and CBspayments on settlement requests received from the system operatorspayments on government securities transactionsall clients' and budget payments equal or exceeding BGNProvides settlement finality for:money transferspayments on securities transactions
8RINGS Functional Characteristics RINGS accepts for settlement payment orders (credit transfers) and settlement requests by the ancillary systems’ operatorsAll CBs (head quarters) are direct participants - payments executed in RINGS are processed by CBs within one hourNo restriction imposed on the value of payment ordersQueuing facilities (queue control, re-prioritization)Automatic gridlock resolutionPricing policy - full cost recovery principle and incentives to submit payments early in the dayCommunication platform - SWIFT (FIN Y-copy)SWIFT network is used for message transfer between CBs and RINGSancillary systems settlement requests are in SWIFT formatRINGS operating hours 08:00 – 17:30
9Characteristics and Performance RINGS is a modern, safe and efficient payment systemAdequate architecture & efficient organizationModern means of security & common technological standardsSystemic risk reductionReal time monitoring & efficient pricing policyEffective risk management by the BNBOptimal liquidity management by CBsAdopted international payment systems standardsProcessing time: <10 sec. for 99% of payments, <15 min. for 1%Capacity: services up to 100 participants & up to payments dailyRINGS Availability Coefficient for 2006: 99.85%Since its launch, RINGS has been operating smoothly without any problemsEmergency situations were managed in compliance with the adopted contingency rules and procedures
10Statistics Processed payments in 2006: Total volume – 983 273 bnbStatisticsProcessed payments in 2006:Total volume –Customer payments volume –Maximum daily volume – 8 747Total value – million BGNMaximum daily value – million BGNThe total value of processed payments in 2006 exceeds 4.7 times the GDP.The daily average value increases from 420 mln in 2003 to BGN 913 mln in 2006, or 117 % increase.The daily average volume increases from in 2003 to in 2006, or 193 % increase.No cancelled payment at the end of the day because of insufficient funds on the account of a participant.RINGS statistical data is a good reason to consider that an efficient and reliable payment system is in placeI shall narrow the focus a bit from the “new economy” to the contribution of information and communications technology (ICT)ICT contributes as an output and also as an inputCountries may differ in the size of their ICT producing sector. But it is likely that all will find ICT making a larger and larger contribution on the input sideThe output share is easy to calculate since there is no need to measure prices. But the input share requires the estimation of asset stocks and hence price indices are required.
11Low value payment system -BISERA Processes: Credit transfers and Direct debitsAll CBs participateCalculates the positions of the CBs, resulting from retail payments, using multilateral nettingSends 2 times per day settlement requests in RINGSNo payment queuesStatistics of processed payments in 2006:Volume:Value: mln. BGN
12Card payment system BORICA Calculates the positions of the CBs, resulting from transactions with bank cards, using multilateral nettingSends 2 times per day settlement requests in RINGSNo payment queuesStatistics for 2006:Cards issued:ATMs: 2 360POS:Volume of transactions:Value of transactions: mln. BGN
13Government securities settlement BNB operates Government Securities Depository (GSD) and the settlement system – BNBGSSSOn the primary market – settlement on the day of issue.On the secondary market – on the day of trade.Settlement executed on a trade by trade processing.Statistics for 2006:Volume: 6 355Value: mln. BGN
14Central DepositoryCalculates the positions of the CBs, resulting from deals with corporate securities, using multilateral nettingUses DVP Model 2 /money on net basis, securities on gross basis/Settlement cycle T + 2Sends once a day settlement request in RINGSStatistics for 2006:Volume:Value: mln. BGN
15Key developments in the payment system over the last several years national RTGS system for large value payments – 2003,Introduction of the Law on payments as a legal framework – – 2005,creation of a National Council on Payment Systems with the participation of the BNB, ACB as a representative of the banking community and the payment system operators ,IBAN standard for all bank accounts – 2006,SWIFT standards for messages within the national retail payment system – BISERA – 2006,migration of card system to EMV standards
16Challenges aheadPayment services directive – unified rules, more competition, consumer protection, transparency.TARGET 2, and T2S – further integration, enhanced services, liquidity management improvement.SEPA – integration, standardization, interoperability, new business opportunities.
17ApproachNational Council on Payment Systems – overall responsibility for payment system development, incl. for national SEPA plan.Consultative groups in key topics (7) – instruments, infrastructures, legal framework, card payments, TARGET 2, securities settlement systems, budget payments.