The Central Bank of Nigeria (CBN) has released revised guidelines for licensing of Payment Service Banks (PSBs). The new guidelines released on Thursday 27, August 2020 also barred lPSBs operators from accepting foreign exchange deposits
The revised guidelines signed by Kevin Amugo, Director, Financial Policy and Regulation Department, CBN, was addressed to all banks, telecommunications firms, Mobile Money Operators and banking agents is an upgraded version of the first one released in October 2018.
The guideline which barred PSBs from collecting foreign deposits also emphasized that PSBs are not allowed to grant any form of loans, advances, and guarantees (directly or indirectly.)
It also added that the name of PSBs must not include any word that links it to the parent company.
Payment Service Banks shall carry out the following activities:
- Accept deposits from individuals and small businesses, which shall be covered by the deposit insurance scheme;
- Carry out payments and remittances (including inbound cross-border personal remittances) services through various channels within Nigeria;
- Sale of foreign currencies realized from inbound cross-border personal remittances to authorized foreign exchange dealers;
- Issue debit and pre-paid cards on its name;
- Operate an electronic wallet;
- Render financial advisory services;
- Invest in FGN and CBN securities; and
- Carry out such other activities as may be prescribed by the CBN from
time to time.
The Eligible promoters according to the guideline are:
- Banking Agents;
- Telecommunications companies (Telcos), through subsidiaries;
- Retail chains (supermarkets, downstream petroleum marketing companies);
- Postal services providers and courier companies;
- Mobile Money Operators (MMOs that desire to convert to PSBs shall comply with the requirement of the Guideline);
- Switching Companies;
- Financial technology companies (Fintech);
- Financial Holding Companies; and
- Any other entity on the merit of its application subject to the approval of the CBN.
“Where the promoter of a PSB is a regulated entity, it shall be required to obtain an approval or a ‘no objection letter’ from its primary regulator and submit the same at the licensing application stage to the CBN,” the guideline stated.