Payment Systems Oversight
"Oversight of payment systems is a central bank function; whereby the objectives of safety and efficiency are promoted by monitoring existing and planned systems, assessing them against these objectives and, where necessary, inducing change."
Central Bank of Kuwait use the following processes to cover within the payment systems strategy and oversight:
Conduct Internal Reviews: The internal reviews are planned periodically throughout the year. There are different types of internal reviews; reviews on the participant performance, reviews on operations performance, reviews on risk management… etc. Different types of reviews are planned at different frequencies. This creates a continuous monitoring over the payment systems operations and encourages the discipline.
Conduct External Examination: External examination is planned periodically throughout the year. Contrary to internal reviews, external examinations handle reviewing all the relevant areas. These examinations cover appliance of the participant to the licensing and participation agreements, participant system applicability, participant liquidity & collateral trends, participant transaction trends,…. etc. Such examinations create a discipline and educate the participant. Every participant is subject to equal access and regulations throughout the examination. Examination is not initiated unless an agreement on the scope and the time plan with the participant is reached.
Central Bank of Kuwait aims to achieve the objective of oversight by monitoring Kuwait's Automated Settlement System for inter-participant payments (KASSIP) and clearing cheques center. Also, Central Bank of Kuwait coordinates with other parties in Kuwait such as K-net to accomplish this objective.