By: Nghiinomenwa Erastus
After 20 years in existence the country’s Interbank Settlement System has finally managed to process and settle N$1 trillion worth of payments.
In other words, the country experienced more electronic funds transfer (EFTs) and Payment Card transactions cleared through Namclear and single-item large-value transactions 2021`.
The landmark achievement occurred last year, due to the high volume of payments settled through the country systems, the central bank reported last week.
This is in the midst of the pandemic that shook systems and created bottlenecks in supply chains all over the world.
The Namibian Interbank Settlement System (NISS) is a Real-Time Gross Settlement System (RTGS) that processes and settles time-critical payments.
Interbank transactions settled in the NISS constitute retail (individual) payments such as electronic funds transfer (EFTs) and Payment Card transactions cleared through Namclear and single-item large-value transactions processed by the participants in NISS.
The central bank highlighted that the highest settlement values recorded to date is due to high volumes of the new domestic EFT system streams through Nampay.
The utilization of the lending facilities (by commercial banks), specifically the 7 Day repo of the central bank.
While the purchase/resell of government securities (bonds and treasuries) as the budget deficit enhances public debts, accumulation has also contributed to the volume of settlement.
Tate Calle’s wishes and labour are also paying off as more of the local savings that were invested outside the country are coming back to the country contributing to the settlements contributed under NISS.
The central bank reported that inflows of funds in compliance with Regulation 28 by the Namibia Financial Institutions Supervisory Authority (Namfisa) are one of the payments that contributed to the N$1,05 trillion last year.
Zooming in 2021, aggregate settlement value recorded in the NISS of N$1.050 trillion- the share of single-transactions-settled in the system amounted to N$726,4 billion.
This translates into 69% of the total value settled.
While the retail payment transactions cleared through Namclear were N$323,9 billion, representing 31 percent of the aggregate value settled.
The central bank explained that although the single-item-large-value-transactions contributed the most to the milestone settlement value, “it is worth noting that the retail transactions also contributed significantly, from a payment stream perspective”.
There is noticeable public interest in electronic banking since the introduction of the Internet as more people are demanding home banking facilities.
Out of the retail transactions processed, the Electronic Fund Transfer stream composed 94,13%t of the total of such payment value settled.
Moreover, of the total retail payment transaction value, the Enhanced Credits which is part of NAMPAY contributed 52,37% of the total retail payments settled.
The same-day payment stream contributed 36,43%.
The central bank explained that upsurge in retail transactions reflects the industry’s efforts towards the decommissioning of the old EFT streams in line with the regulatory requirements to promote efficiency in the processing of payments in the NPS.
Equally important to note, the share of payment card stream in relation to the total retail payments was 5,87%.
The participants in the payment system comprise commercial banks, and others while the central bank is the facilitator and the regulator.
By executing that responsibility to ensure the overall soundness and efficiency of the payment system.
The Bank is the controller of the clearing house and provides accommodation accounts to all clearing banks to facilitate settlement.
The role of a fully functional and modern payment system in the economy cannot be understated.
As it propels the meaningful participation of all agents in the economy at large.
The central bank stated that it remains one of its preoccupations to foster a modern, safe and secure national payment system that delivers efficient and effective payment services.
Email: erastus@thevillager.com.na