BSL to develop several guidelines to support digital financial services

Business

The Bank of Sierra Leone (BSL) is said to be strengthening the regulatory framework for digital financial services, as they have developed several guidelines including: Tiered Know-Your Customer Framework; Agent Network Guidelines; E-Money Guidelines; and will amend the Other Financial Services Act of 2001. To accelerate financial inclusion, the BSL is collaborating with local and international partners to leverage on emerging technological advancements in the financial sector. As part of the World Bank funded Financial Sector Development Project, the procurement of the National Switch is in progress. “Once operational, the National Switch will create a single, integrated and efficient platform for the settlement of interbank electronic payments. It will also allow universal access to digital transactions, thereby reducing the dependency on cash and associated risks” said Minister of Finance Jacob Jusu Saffa. In his Budget Speech he went further to explain that bank customers will be able to make withdrawals from any ATM, irrespective of which institution they bank with. “Eventually, E-commerce activities will be user-friendly, safer and faster, through the electronic settlement of all financial transactions.” On enhancing the collateral registry at the BSL which he said is in progress this has been augmented by the creation of a credible Credit Reference Bureau based on a nationwide digital identification system. This will ultimately provide credit and financial histories for citizens, ensure the availability and exchange of reliable credit information and ultimately accelerate nation-wide financial inclusion.

As part of the Financial Sector Reforms, the BSL he said remains committed to deepening financial intermediation, promoting financial inclusion and safeguarding the stability of the financial system. As part of on-going efforts, the BSL conducted stress testing of the resilience of the banking system in 2019. Key financial soundness indicators revealed that the banking sector is well capitalised, liquid, profitable, and with a continuous reduction in non-performing loans (NPLs). In 2020, the Bank of Sierra Leone will continue to strengthen the financial soundness of banks, while exerting stronger oversight over their cross-border relationships. The Bank of Sierra Leone is also developing a Deposit Insurance Scheme to promote financial sector stability. “Whilst the two state-owned banks are now profitable, in line with the recommendations of the recent World Bank/ IMF diagnostic study, enhanced-supervision by the Bank of Sierra Leone will remain. This will continue until Sierra Leone Commercial Bank and the Rokel Commercial Bank develop sound long-term business strategies and a legal and regulatory framework for corporate governance, among others” he said.

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