Daily News Egypt

FRA sets plan for non-banking financial sector to implement state strategy for digital transformation - Daily News Egypt

Advertising Area

Advertising Area

FRA sets plan for non-banking financial sector to implement state strategy for digital transformation

FRA determines six phases to implement plan

The Financial Regulatory Authority (FRA) has prepared a guiding plan for adjusting the situation of dealers in the field of non-banking financial activities with the aim of raising awareness of the needs of enforcing the law to use non-cash payment methods No 18 for year 2019 and explained the commitments resulting from issuing that law.

Mohamed Omran, Chairperson of the FRA, issued Circular No 2 for 2019 to regulate the use of non-cash means of payment in completing financial transactions for all companies and entities subject to the supervision and control of the authority and its clients.

Omran explained that the circular specifies the scope of commitment to non-cash payment methods in financial transactions and obliges companies and entities subject to the supervision and control of the authority.

The first part includes non-cash payment in the case of the payments exceeding the value determined in the executive regulations of the law at the cash funding, which is the funding offered by financial leasing, real estate funding, and factoring companies, in addition to any micro funding association or any non-banking financial body, and also at the distribution of profits resulting from shareholding in company capitals or investment funds and at the disbursement of aids and donations by associations and institutions in the field of civil work or individuals and establishments of any kind.

This is also applicable in cases of payments during purchasing, renting, utilisation, usufruct of lands or real estate, and when the dues of suppliers, contractors, and service providers are paid.

Also, when the dues of workers, experts, heads, chairpersons, committees, and social insurance subscriptions are paid when the number of workers and their monthly salaries exceed the value specified in the executive regulations of the law.

The chairperson of the authority said that the other side of commitment is represented in collecting the instalments of cash funding, instalments of insurance documents, syndicate subscriptions, and private insurance subscriptions.

Omran stated that the FRA has preferred to hedge with the initiative by developing a guiding model for a six-phase reconciliation plan and calls upon companies and entities under its supervision to speed up their implementation and to prevent any entities subject to the supervision of the FRA or those responsible for it from natural persons to penalties and fines in Articles 7 and 8 of the Non-Cash Payment Methods Law.

He noted that the period of adjusting conditions takes six months from the date of starting work of the executive regulation of Law No 18 of 2018. The adjustment scheme includes several phases.

The first phase includes the start of the consultation and the selection of non-cash payment providers to be contracted to implement the payments and collections if the clients of the entity do not have existing bank accounts or other means of non-cash payments, such as debit and credit cards, mobile payments, or prepaid cards.

Mohamed El Sayed Okasha – Managing Director Fawry, told the Daily News Egypt that his company has submitted a request to the FRA to obtain the first license to work as non-cash payment providers, adding that his company has already contracted many finance companies including retail and microfinance companies, business associations in Alexandria, Dakahlia and other bodies and companies to provide non-cash payment services.

Okasha expects that Fawry will succeed in signing a large volume of contracts with various companies operating in the non-banking financial sector to provide non-cash payment services in the coming months.

This is followed by the transition to contracting with non-cash payment providers, and obtaining the prior approval of the FRA required only for those licensed to engage in microfinance activity in the matter of activating non-cash payment transactions for its customers.

The third phase witnessed the experimental operation of all non-cash payment services and the start of the awareness plan for customers and stakeholders, and the fourth phase with the start of the implementation of non-cash collection of the payments of the entity.

The fifth phase begins with the implementation of non-cash payments or disbursements of the entity’s payments.

Finally, the sixth phase is complete integration to all payments (payment and collection) by means of non-cash methods and handling all obstacles.

Advertising Area

Breaking News

No current breaking news

Receive our daily newsletter