Financial Inclusion: Three Payment Service Banks Get CBN Approvals-in-Principle
As part of its broader objective of enhancing financial inclusion and the development of the nation’s payment system, the Central Bank of Nigeria (CBN), on Wednesday, said it has issued Approvals-in-Principle (AIP) to three Payment Service Banks (PSBs).
PSBs grant AIPs to operate as Payment Service Banks are Hope PSB, Money Master PSB, and 9PSB.
PSBs are also part of efforts to ensure a sound financial system while enhancing access to financial services for low-income earners and the unbanked in the society and expected to have a minimum paid-up capital and capital reserve of N5bn.
Nigeria is believed to have over 50% of its adult population in the unbanked category, most of who attribute their financial exclusion to the low availability of banks, high transaction costs, and challenges associated with accessing funds.
A statement by the Director, Corporate Communications Department of the CBN, Isaac Okorafor, said the move will also increase access to deposit products and payments services through a secured technology-driven environment.
He explained that the AIP was part of the processes the institutions had to fulfill in order to be granted a license to operate as fully-fledged Payment Service banks.
According to Okorafor, the decision of the CBN to issue the AIP to the applicants followed the institutions’ satisfaction of documentation and other laid down conditions.
According to Okorafor, the decision of the CBN to issue the AIP to the applicants followed the institutions’ satisfaction of documentation and other laid down conditions.
Sequel to the issuance of the AIP to the three banks, he said, are expected to submit their respective applications for the grant of a final license, not later than six months after the AIP.
Speaking further, he disclosed that the CBN code of corporate governance for banks would also be applicable to the PSBs.
Speaking further, he disclosed that the CBN code of corporate governance for banks would also be applicable to the PSBs.
As part of the financial requirements, the CBN also proposed a non-refundable application fee of N500,000 and non-refundable licensing fee of N2m, adding that “investment of the share capital deposit shall be subject to availability of investment instruments and upon the grant of license or otherwise.”
The deposit shall be refunded to the applicant, “together with the investment income, if any, after deducting administrative expenses and tax on the income.”
In October 2018, the Central Bank of Nigeria (CBN) introduced regulations and guidelines for the licensing and operations of payment service banks (PSBs) in an effort to leverage technology to promote financial inclusion. PSBs are banks whose operations are limited to transactions involving deposits, withdrawals, and money transfers.
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