By Emeka Ejere
In a bid to further leverage on technology to promote financial inclusion and enhance access to financial services to the rural poor, low income earners and financially excluded of the society, the Central Bank of Nigeria (CBN), has issued guidelines for licensing and regulation of payment service banks (PSBs) in Nigeria.
The PSBs are expected to leverage on mobile and digital channels to enhance financial inclusion and stimulate economic activities at the grassroots through the provision of financial services.
Recall that the apex bank on October 5, had issued an exposure draft (ED) on the guidelines for licensing and regulation of PSBs in Nigeria, with deadline for the receipt of comments and observations ending on October 19.
Stakeholders’ inputs arising from the ED have been used to update the guidelines.
According to the CBN, the National Financial Inclusion Strategy (NFIS) seeks to ensure that over 80 per cent of the bankable adults in Nigeria have access to financial services by 2020.
The apex bank in collaboration with stakeholders launched the NFIS on 23rd October, 2012 with a view to reducing the exclusion rate to 20 per cent by 2020.
“Despite several initiatives including the Introduction of Microfinance banking, Agent Banking, Tiered Know-Your-Customer Requirements and Mobile Money Operation (MMO) in pursuit of this objective, the inclusion rate remains below expectation,” a statement by the apex bank said.
“The CBN, in the circumstance and in collaboration with critical stakeholders in the digital financial ecosystem, such as the Nigerian Communication Commission, commercial banks, mobile money operators and telecommunication companies have conducted several study tours of other jurisdictions that have made significant progress in driving financial inclusion,” the statement further said.
The PSBs are envisioned to facilitate high-volume low-value transactions in remittance services, micro-savings and withdrawal services in a secured technology-driven environment to further deepen financial inclusion and help in attaining the policy objective of 20 per cent exclusion rate by 2020.
The guideline is issued pursuant to powers conferred on the CBN Governor by the CBN Act 2007 and BOFIA 1991 (as amended). It covers the definition; objectives; eligible promoters; licensing requirements; corporate governance; business conduct; and permissible activities.
Other areas covered include: the requirements for prudential regulation; supervision; Know Your Customer (KYC), consumer protection as well as Risk Management of the proposed PSBs in Nigeria.
According to the guidelines, the minimum capital requirement, application and licensing fees for PSBs are as follows: Minimum capital ₦5,000,000,000.00; non-refundable application fee ₦500,000.00; non-refundable licensing fee ₦2,000,000.00; change of name fee ₦1,000,000.00.
These requirements may be varied from time to time by the CBN.