Nigeria’s apex bank, the Central Bank of Nigeria (CBN) has barred operators of Payment Service Banks (PSBs) from accepting foreign exchange deposits
The CBN issued the ban in the reviewed guidelines for licensing and regulations of PSBs released on Thursday on its website, an upgraded version of the circular the CBN issued on October 05, 2018 to all banks, telecommunications firms, Mobile Money Operators and banking agents among others.
According to the guideline signed by Kevin Amugo, Director, Financial Policy and Regulation Department, CBN, the bank emphasised that PSBs are not allowed to grant any form of loans, advances and guarantees (directly or indirectly.)
It added that the name of PSBs must not include any word that links it to the parent company.
It reads, “#CBN issues revised guidelines for the Licensing and Regulation of Payment Service Banks (PSBs) in Nigeria…https://t.co/WTuFJo9xNa #PSBs
— Central Bank of Nigeria (@cenbank) August 27, 2020
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 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 following may promote PSBs:
* 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 this 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 approval or a ‘no objection letter’ from its primary regulator and submit same at the licensing application stage to the CBN,” the guideline stated.