Article 34 of the Central Bank of Malta Act, establishes that it is the role of the Central Bank of Malta (the Bank) to regulate and oversee domestic payment systems. Payment systems include interbank and retail systems, as well as clearing, settlement, securities clearing, securities settlement, netting and similar systems. The Bank is also the regulator of payment services and payment instruments.

Together with the European System of Central Banks (ESCB), the Central Bank of Malta is also responsible for ensuring the smooth operation of payment systems within the European Union.


Interbank payment systems

The Bank itself operates TARGET2Malta, which forms part of TARGET2, the ESCB's Real-Time Gross Settlement (RTGS) system for the euro. MaRIS, the RTGS system for the Maltese lira, is no longer in operation.


Retail payment systems and services

Retail payments account for the bulk of payments within the economy and include consumer and corporate payments. Along with overseeing retail payment systems, the Bank may regulate payment services and payment instruments by means of Central Bank of Malta Directives. It also has the authority to promote the establishment of a bank clearing system and to provide facilities for that system. The Central Bank of Malta, together with six credit institutions, is a member of the Malta Clearing House.

The Bank is responsible for the oversight of the Single Euro Payments Area (SEPA) project, a self-regulatory initiative spearheaded by European commercial banks. It has also been involved in the domestic introduction of the International Bank Account Number (IBAN), a set standard for bank account numbers that uniquely identifies a customer’s bank account held at a bank anywhere in the world.


Securities Settlement Systems

The Central Bank of Malta is responsible for the oversight of domestic securities settlement systems. Together with other ESCB central banks, it is involved in the design and implementation of Target2-Securities (T2S).


Oversight

A domestic payment system may not be established or operated unless the system is approved and authorised by the Bank. The Bank is empowered by law to oversee the functioning of domestic payment systems in order to maintain the stability and security of those systems, and in order to ensure the confidence of their users. The Central Bank of Malta also collects statistics and data for the ‘Blue Book’ of the European Central Bank (ECB).


Glossary of terms related to Payment, Clearing and Settlement Systems

The ECB has published a glossary of terms relating to the technical aspects of payment, clearing and settlement systems in the European Union. These have been prepared in a user-friendly manner to promote their acceptance. The Glossary aims to ensure consistency in the terms used in publications issued within the ESCB.