The Central of Nigeria (CBN) has released the Guidelines for the Licensing and Regulation of Payment Service Banks (PSBs) in Nigeria to ensure transparency in their operations. The guidelines, which was first issued in 2018 was amended in 2020.
The apex regulator directed the PSBs to leverage on technology to provide services that would be easily accessed by the unbanked population and those in hard-to reach areas of the country.
Details of the CBN release published by the News Agency of Nigeria (NAN):
“This framework hereby provides a set of regulations that are targeted at streamlining operations of PSBs, ensuring transparency in their operations as well as ensuring adequate customer protection.
“The framework focuses on corporate governance, risks management of the PSBs and safety of funds to the consumers of the PSBs’ products.
“This framework also aims to ensure that sound risk management practices are embedded in the operations of the PSBs.
“The PSBs are required to comply with relevant extant regulations and CBN’s prudential guidelines and circulars which were issued periodically.
“ They shall use the words “Payment Service Bank” in their names to differentiate them from other banks.
“ However, the name of a PSB shall not include any word that links it to its parent company or promoter.”
The CBN also stated that the PSBs “shall operate mostly in the rural areas and unbanked locations targeting financially excluded persons with not less than 25 per cent financial service touch points in such rural areas as defined by the CBN from time to time.
It said that the PSBs shall “enter into direct partnership with card scheme operators. Such cards shall not be eligible for foreign currency transactions.
The PSBs were also directed to deploy ATMs in some of these areas; deploy Point of Sale devices; and be at liberty to operate through banking.
They are also required to roll out agent networks with the prior approval of the CBN; use other channels including electronic platforms to reach-out to its customers; establish coordinating centres in clusters of outlets to superintend and control activities of the various financial service touch points and banking agents.