CBS announces operational measures during COVID-19 pandemic |26 March 2020
The COVID-19 pandemic is taking a brutal toll on the global economy, and despite the fact that Seychelles imposed travel bans only recently, the national economy is facing economic turmoil as visitors stop arriving and foreign exchange stops flowing in, and local economic activities are disrupted.
In view of the crisis which is causing economic disruption around the world, the Central Bank of Seychelles (CBS) on Monday announced, in addition to the monetary policy for Q2, 2020, new operating measures aimed at improving banking services and the administration of government securities during the pandemic.
Operational measures
As the public are urged to stay home, limit non-essential movement and practice social distancing, demand for digital payment platforms and cashless transactions have increased, said head of the financial inclusion and market division James Jean.
As such, CBS has engaged with commercial banks and financial institutions to fast-forward internal processes and make such services available to the public and merchants at the soonest. Among the existing digital platforms in Seychelles are Seychelles Electronic Funds Transfer (SEFT) and contactless payment cards.
Seychelles Electronic Funds Transfer (SEFT) are transactions effected through online, internet and mobile banking platforms or applications, which are not conducted face to face and do not involve documentation or manual processes. In a bid to encourage the public to adopt this mode of payment, CBS has together with commercial banks agreed to waive the charge for the service which was usually R15 and R20.
As for contactless card payments which most commercial banks are in the process of introducing at different phases of progress, the limit for contactless payments has now increased to R1,000 per transaction with the daily limit increased to R2,000. Banking institutions have agreed to fast-track issuance of the cards and the reconfigurations of their Point of Sales (POS) devices and systems, to allow customers to use such payment.
According to Mr Jean, commercial banks are also in agreement to issue credentials and payment instructions on the same day or at least the next business day and to fast-track. The same applies to account opening, issuance of cards, POS, internet banking credentials.
As for smaller banking institutions who are yet to introduce digital payment platforms but instead provide SEFT Phase 2 services, clients are encouraged to register to get their credentials to effect electronic payments.
Additionally, banks are being urged to ensure that their call centres are available, effective and efficient during these periods as more people adopt electronic modes of payment and require information about the services.
He also urged merchants not to refuse card payments below certain limits as this is against VISA rules and their agreement with banks. Members of the public can report such incidents to the bank who issued the POS to take action against the merchant, if such happens.
Members of the public requiring further information are encouraged to contact CBS on 4282000. Upon placing the call, callers will have four options and will be directed to different hotlines, stated below:
1. COVID-19 Relief Measures
2. Treasury Bills and Bond assistance
3. General queries and complaints
4. To Speak to an operator
The public may also request for information about treasury bills, bonds and general statistics and address their complaints through e-mail at info@cbs.sc .
Administration of Government Securities
As per section 34(1)(b) of the Central Bank of Seychelles Act (2004, as amended), the Central Bank of Seychelles (CBS) acts as agent to the government of Seychelles for the issuance and management of Government Securities. One of the objectives of the CBS is to promote financial and economic stability. To this end, the CBS has established processes to satisfy these objectives in the event of force majeure, aimed at ensuring the government can raise funds from the market to finance expenditure needs.
Procedures for issuance of Treasury Bills during force majeure event
The procedures for issuance and management of T-Bills during force majeure events shall be by brief announcement 3 working days before T-Bills auction, on national television (SBC) and newspapers.
Detailed notice of the T-Bills auction will be available on the CBS website at: https://www.cbs.sc/GovernmentDebt/tendernotice.html
Details will include Date of T-Bills Auction, Issuance amount and Issuance date Bid Submission. Submission of T-Bills Tender form limited to electronic means only, and completed tender forms shall be submitted via email to tbillsauction@cbs.sc before or by 8.30am of the auction day. The prescribed tender form for T-Bills will only be available on the CBS website at https://www.cbs.sc/GovernmentDebt/applicationforms.html
Current process of disseminating auction results to applicants will be maintained. All applicants will be advised of the auction results either through a text message, email or a phone call on the same day of the auction. Successful applicants will be informed of the allotted amount, amount payable, mode and deadline of payment.
As for payment and issue of T-Bills, payments will be accepted through Bank Transfer only and CBS will no longer accept cash or cheque payments. The following will be maintained: payment of T-Bills should be effected by 9am on the issue date, i.e., three working days following the auction day. The entire bid will be rejected if full payment on any bid is not received by close of business on the issue date. Confirmation letter of T-Bills shall be issued via email to all successful applicants subject to receipt of payments.
PMC Bond
The PMC Bond, at a value of R200 million which was launched in January remains open to individuals and legal entities. Applications are to be submitted via email tofmd@cbs.sc . Successful applicants will be notified by email, telephone call or text message and the mode of payment for Bonds will be through Bank transfer and no cash or cheque will be accepted.
The Bank has reviewed the CBS Act to allow for the CBS to purchase to otherwise acquire securities issued or guaranteed by the government, known as the buyback facility for instance if an investor is strapped for cash. Investors may apply through the CBS website to sell their financial instrument and must also sign an agreement, declaring their intention to sell. The necessary amendment proposals to the CBS Act is expected to be presented to the National Assembly this week.
Additionally, Maturity proceeds of T-Bills will be settled by the CBS as per the current process as outlined in the Operational Guidelines for Issuance and Management of Government Securities.
As for payment of interest and principal of bonds, CBS shall process any payment of interest and principal of bonds as per the current process as outlined in the Operational Guidelines for Issuance and Management of Government Securities.
Laura Pillay