January 22, 2023 | 2 weeks ago

New Monetary and Banking Bill: A series of new features

National Payments Committee, digitalization of payments, emergency cash flow deposit, digital dinar, Islamic banks...

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The new draft bill on monetary and banking law introduced some new provisions in relation to Ordinance No. 03-11 on currency and credit, some of which remain in force. The Currency and Credit Council extends its authorization powers to “investment banks, digital banks, payment service providers and independent brokerage intermediaries and allows the opening of foreign exchange offices”.

The bill also proposes the “reintroduction” of the terms of office of the Governor and Vice-Governors and a reorganization of the component of the Board of Directors of the Banque d'Algérie and the Currency and Credit Council.

This bill provides for the setting up of the National Payments Committee, which will be responsible for "drawing up the draft national strategy for the development of non-cash means of payment and monitoring its implementation, after approval by the public authorities".

Moreover, the Banque d’Algérie can now, under the new law, grant “an advance” to the public Treasury, in the event of an exceptional and unpredictable crisis, such as COVID-19 pandemic. In addition, the draft bill requires banks, financial institutions and micro-credit institutions or bodies to "become member of and provide information to the Risk Center".

To safeguard financial stability, this bill also provides for the introduction of the "Emergency cash flow deposit" as a last resort to a solvent bank facing temporary liquidity stress.

The draft bill provides both for the authorization of banks and financial institutions carrying out banking operations ‘exclusively’ in the field of Islamic finance and for the preservation of dedicated ‘one-stop shops’.

The bill also provides for the digitalization of payments by introducing a digital form of cash, developed, issued, managed and controlled by the Banque d’Algérie, called the “Dinar Algérien Digital”.

In addition, the Banque d’Algérie's mission in the area of security and oversight of payment systems has been extended to include clearing, settlement and delivery systems for financial instruments.

January 22, 2023 | algeria-logo