The venture was set in motion between September and November 2019, as per a report published by Sri Lanka’s Daily Mirror on July 2.
The central bank intends to set up a blockchain powered platform that would empower the government and banking industry to safely distribute and upgrade customer info across the country.
While giving a speech at a meeting in Colombo on June 30, Kumaratunge, the central bank’s director of payments and settlements informed participants as follows:
“We invited software companies to develop a shared KYC PoC free of charge, as a national project. The response to join this project, both locally and internationally, has been extremely heartening and we are happy to say that we have finalised selecting suitable applicants to begin development shortly.”
As per Kumaratunge, 56 applications, from both domestic and overseas firms, were submitted to the central bank for the endeavor, and three of them were shortlisted. Of the three firms short-listed, one of them is an overseas tech company.
The three qualified firms will now begin working on the PoC, and the entire exercise is anticipated to be completed in a span of six to nine months.
Following the completion, the developers will table their detailed report on the PoC for validation by the payments and settlements department of the National Payment Council. Eventually, it will be assessed by the Monetary Board.
Numerous Sri Lankan banks have expressed their willingness to join the venture, as per Kumaratunge. The central bank anticipates the likely advantages of the common KYC platform to bring more customers in a competent manner, reduce management expenses thereby leading to an enhanced financial integration throughout the country.
The central bank provided the following additional details:
“The party selected to implement the PoC will neither be prejudiced from applying for any subsequent commercial development of a shared KYC facility that may take place nor would the company obtain any preference due to their engagement in this POC development.”
A few days before, Sri Lanka was removed from the Financial Action Task Force’s (FATF) “grey list” (countries that are perceived as safe haven for aiding terror financing and money laundering). Three years before, Sri Lanka was added to the grey list.
Last October, FATF stated that a validation of the steps taken by the country few months back had convinced scrutinizers that the AML/CFT reformations have started and are consistent. Furthermore, the FATF panel members were satisfied that “the necessary political commitment remains in place to sustain implementation in the future.”