The rules governing the creation, operation and supervision of the digital unit for providing banking services by credit institutions were announced
Instructions on how to operate neobanks were announced; In this directive, the central bank has prohibited the independent activities of neo-banks and made their activities subject to the digital branches of banks and receiving a special license from the central bank
According to the Iran digital economy annotation, based on the “regulations governing the creation, operation and supervision of the digital unit for the provision of banking services by credit institutions”, providing services and conducting banking operations offline and through the Internet or other digital platforms under various titles, including Neobank, branch Virtual and other similar cases are allowed by the credit institution only in the form of a digital unit to provide banking services with its own unique identifier.
Also, it is not allowed to introduce the digital unit of providing banking services in the advertisements of the credit institution in such a way as to make the mentioned unit as an independent credit institution in the mind of the audience.
The credit institution is obliged to prominently use the name of the credit institution at the end of the title of the said unit in the advertisements of the digital unit providing banking services, and in all media and advertisements, the full phrase “Title of the digital unit providing banking services + the name of the credit institution” along with Include the trademark of the credit institution.
In this section, the central bank has required the neobanks that have been active and have done advertising activities to stop using their brand name independently and must also use the name of the credit institution and the bank that are under it in addition to their name. . According to this clause, Blubank and Bankino, as the first neo-banks that have conducted commercial activities independently, must henceforth indicate the name of the credit institution under which they operate.
Although this section of the Central Bank’s instructions is mostly written for the purpose of advertising to the public and preventing the activities of unauthorized credit institutions, on the other hand, it has moved towards simplifying the way of monitoring and limiting the activities of neo-banks.
Until now, the central bank had not specified in its instructions how to introduce or advertise various products of banks and credit institutions, but now in this instruction, it has specified how to advertise activities.
How to obtain a license for neobanks and digital bank branches
On the other hand, the central bank, in addition to emphasizing that any activity by neo-banks – in this instruction, the emphasis is on the digital unit of providing banking services – must be carried out under the name of the main bank and credit institution, it has stipulated that the activities of the digital unit of banks must be clearly be approved by the central bank.
According to this instruction, “a credit institution applying for the establishment of a digital unit to provide banking services is obliged to submit its request to the Bank Licensing Department of the Central Bank” and the Banking Licensing Department of the Central Bank, after receiving the application of the credit institution, inquires about the implementation of anti-money laundering rules and performance In terms of indicators of banking health and risk adequacy, the institution will carry out compliance with the notified rules related to national payment systems, and finally, those inquiries must be approved by the Central Bank’s deputy supervisor, and after his approval, it will be submitted to the Commission for Regulation and Supervision of Credit Institutions in order to To make a decision regarding the request of the applicant’s credit institution.
In case of approval of the Regulation and Supervision Commission of Credit Institutions with the creation of a digital unit for the provision of banking services by the applicant credit institution, the Banking Licensing Department will notify that credit institution and, while granting a license, allocate a unique identifier for the digital unit for the provision of banking services.
In this directive, the central bank has not allowed neo-banks to operate independently, but on the other hand, it has not left the hands of banks to create digital branches, and they must obtain permission from the central bank to operate in this sector.
In principle, the digital units of the central bank do not operate independently and are under the supervision of the bank, but they need to obtain independent licenses for their operation.
This instruction also states that the services provided in the digital unit of providing banking services of the credit institution should only be provided through the comprehensive centralized banking system in the context of the data center of the credit institution, and the provision of these services through another centralized system is prohibited.
Meanwhile, providing services through an independent integrated system allows neobanks to operate and provide more diverse services.
In this instruction, it is stated that the credit institution is not allowed to create or acquire an independent company for the operation of the digital unit providing its banking services, and if the credit institution intends to outsource a part of the IT services for the operation of the digital unit providing its banking services, it can only Through direct contracts with outsourcing companies and contractors, subject to complying with the provisions of the minimum requirements directive regarding information technology risk.
How to monitor neobanks and digital units of banks
In the monitoring section of this instruction, it is stated that if after issuing a license for the activity of a digital unit providing banking services, the necessary conditions for the activity are lost and the credit institution does not take any action to correct it, and after three months have passed after the warning and continuation Violation of the operation regulations of the digital unit providing banking services of the credit institution will be suspended and finally the credit institution is obliged to provide the necessary services to the customers of the digital unit providing banking services through other electronic banking platforms or in person.
In this instruction, it is stated that the credit institution that has a unit similar to the digital unit of providing banking services at the time of notification of these regulations have a maximum of 6 months to obtain the necessary licenses for the respective unit.
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