October 25, (THEWILL) – The Central of Nigeria (CBN) has released the supervisory framework for Payment Service Banks (PSBs) which, among other things, empowered the PSB operators to sell foreign currencies, especially dollars, to authorised foreign exchange dealers.
The CBN framework also authorised the PSBs to 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.
The framework says the operators are expected to leverage on technology to provide services that would be easily accessed by the unbanked population and those who are in hard-to- reach areas of the country.
The framework focuses on corporate governance, risk management of the PSBs, and safety of funds to the consumers of the Payment Service Banks’ 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 are issued periodically.
The CBN said PSBs are to 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.
They are to enter into direct partnership with card scheme operators. Such cards shall not be eligible for foreign currency transactions; they can also deploy ATMs in some of these areas; deploy Point of Sale devices and be at liberty to operate through banking agents.
The PSBs have also been authorised to roll out agent networks with the prior approval of the CBN; use other channels including electronic platforms to reach-out to its customers and establish coordinating centres in clusters of outlets to superintend and control the activities of the various financial service touch points and banking agents.
The development is seen as a huge success factor in the financial inclusion strategy which empowers Nigeria’s telecoms operators to operate PSBs using the expanding platform of their activities.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
