Payment systems are an integral part of financial infrastructure. A safe and efficient payment system in Uganda is essential for transmitting BOU’s monetary policy as well as maintaining financial stability in Uganda. Its failure as a whole, or that of a participant or component, can cause other areas of the system to fail and thus transmit shocks through the financial system. Therefore, it is essential that BOU mitigates risks in the payment system through oversight of the payment system.
In the implementation of its oversight policy, the Central Bank observes international standards, and undertakes a range of activities that allow it to ensure compliance with these standards. The main activities are:
- Registration of all institutions that apply to be payment institutions and system operators, ensuring that their operations will not compromise or pose a threat to the safety and efficiency of the Ugandan payment system.
- Ongoing monitoring to get a good understanding of how interbank systems function and interact, and how the use of non-cash payment instruments is evolving.
- Assessing systemically important payment systems to determine their compliance with international standards. The oversight activities conducted by the BOU include monitoring the usage and operational performance of Uganda’s Real Time Gross Settlement System (RTGS), more commonly known as the Ugandan National Inter-bank Settlement System (UNISS), and the Electronic Clearing System (ECS) as well as observe payment instruments’ such as mobile money and Automated Teller Machines (ATMs).
- Inducing change through moral suasion and the exercise of its statutory powers.