The Bank of Mozambique has proposed a substantial revision to Notice No. 6/GBM/2015, with the aim of strengthening the protection of funds entrusted by customers in exchange for electronic money. The new proposal, which is still awaiting approval, updates the legal framework applicable to electronic money institutions and banks that hold fiduciary accounts, introducing more stringent security, transparency and supervision measures.
According to the document consulted on Friday (25), ‘given the need to strengthen measures to protect funds received from customers in exchange for electronic money, the Bank of Mozambique, pursuant to the provisions of paragraph 4 of Article 17 of Law No. 2/2008 of 27 February – Law on the National Payment System, establishes a new set of rules’ aimed at ensuring the protection of funds received from customers in exchange for electronic money. 4 of Article 17 of Law No. 2/2008 of 27 February – National Payment System Law, establishes a new set of rules’ aimed at ensuring the integrity of electronic money transactions in the country.
The proposal establishes that electronic money should only be issued after receipt of the corresponding funds, ‘at face value’, and requires payment institutions to provide clear terms and conditions for joining the service, including rules on refunds, commissions and charges.
The fundamental principle guiding the new regulation is the separation of customer funds from the institutions’ own funds. The document clearly states that ’electronic money institutions must protect the funds received from electronic money holders, ensuring that they are at all times separate from other funds arising from their activities or from any natural or legal person other than the holders.’
In addition, the amounts received must ‘be deposited in a trust account with a bank and used in accordance with Articles 6 and 9, respectively.’
These trust accounts, opened with Mozambican banking institutions, must contain contractual clauses that explicitly recognise that ’electronic money holders are the legitimate owners of the funds deposited in that account.’ The issuing institution shall ensure that the balance available in these accounts, after deduction of commissions and bank charges, corresponds exactly to the total amount of electronic money not used by the holders. This verification shall be carried out on a daily basis through accounting reconciliation.
To ensure transparency and control by the supervisory authority, electronic money institutions ‘must authorise the banks where the fiduciary accounts are held to provide the Bank of Mozambique with real-time access to information on the balances, statements and movements of those accounts, and no permission shall be granted to move or alter any data existing in those accounts.’
With regard to the movement of funds, the new notice stipulates that the fiduciary account shall be credited with the amounts received from customers and debited with payments made to the beneficiaries of the electronic money, as well as with refunds to bearers and associated bank charges. These charges shall be provisioned at the end of the business day following their deduction.
To mitigate systemic risks, the Bank of Mozambique limits the concentration of funds in a single bank. Institutions may only deposit up to the amount equivalent to their minimum capital in a single bank; larger amounts must be spread across several banks, not exceeding 25% per institution. Exceptions to this rule may only be authorised by the Bank of Mozambique, upon reasoned request.
Electronic money institutions must protect funds received from electronic money holders
Another innovative point in the proposal concerns the remuneration of deposited funds. The document requires the opening of specific interest-bearing accounts linked to fiduciary accounts and imposes rules for their movement. At the end of each quarter, ‘90% of the net interest balance and other gains arising from the remuneration of funds deposited in the trust account must be distributed to electronic money holders according to their respective average daily balances.’
The remaining 10% must be used for innovation and modernisation of the services provided, in accordance with the instructions of the Bank of Mozambique. Entities such as credit institutions, public bodies, large companies and electronic money agents are excluded from the distribution of interest.
The proposal also regulates the destination of funds from inactive and dormant accounts. After twelve months without movement, the amounts must be transferred to an internal account in electronic money and, if there is no response from the account holders, they will be forwarded to the central bank.
After five years of inactivity, the account will be considered dormant and the amounts contained therein will be transferred to the Dormant Accounts Fund, managed by the central bank itself. ‘The amounts in the Dormant Accounts Fund will revert to the State after 10 years without reactivation or claim.’
Institutions will have 180 days to adapt existing contracts and adjust their operating systems to the new requirements. The document also establishes that ‘violation of the provisions of this Notice constitutes a misdemeanour punishable under the National Payment System Law.’
Finally, the Bank of Mozambique warns that any questions regarding the interpretation and application of this regulation ‘should be submitted to the Banking Services and Payment Systems Department of the Bank of Mozambique.’
With this proposal, the financial regulator aims to consolidate user confidence in electronic money, ensure the stability of the payment system and encourage the adoption of prudent, transparent and inclusive practices in the Mozambican digital ecosystem.
Source: Bank of Mozambique
