Tuesday , January 18 2022
Payment Service Banks

Cbn Approves 3 Payment Service Banks, Prohibits Special Treatment

The Central Bank of Nigeria (CBN) has, on August 27, 2020, announced that it has approved final licenses to three firms to operate as Payment Service Banks (PSB).

The three firms are Hope PSB, Moneymaster PSB and 9 PSB.

CBN said the main objective of setting up PSBs was to enhance financial inclusion by increasing access to deposit products and payment or remittance services to small businesses, low-income households and other financially excluded entities through high volume low-value transactions in a secured technology-driven environment.

The approval is sequel to a revised CBN circular containing the Guidelines for the Licensing and Regulation of Payment Service Banks in Nigeria first issued on October 26, 2018.

The update and review of the Guidelines for Payment Service Banks was in response to market developments since 2018.

The granted final approval to operate as PSBs followed compliance with licensing requirements.

Concerning the recent approvals, CBN stated:

“The licensing of the new PSBs will strengthen Nigeria’s financial inclusion drive leveraging mobile and digital channels.

“The CBN is committed to the implementation of policies that will engender a diverse financial system that meets the needs of all stakeholders.

“The CBN will continue to monitor developments in the sector and grant additional PSB licenses in due course,” the statement stated.

However, the apex bank has prohibited parent companies or any other related entities of a Payment Service Banks from offering any preferential treatment, which negates fair competition, to its subsidiaries.

ALSO READ: Ndukwe Highlights Economic Effect of not Deploying 5G in Nigeria

As contained in the circular to PSBs on Thursday entitled ‘Guidelines for licensing and regulation of Payment Service Banks in Nigeria,’ which was signed by the Director, Financial Policy and Regulation Department, CBN, Kevin Amugo.

“Preferential treatment by a parent company or any other related entity shall, among others, include precluding its subsidiary’s competitor from using its infrastructure or services.

“Offering lower quality of service to its subsidiary’s competitors; offering such infrastructure or services at differential pricing; precluding any specific infrastructure or service as may be prescribed by the CBN from time to time.”

It added that the parent or related entities of a PSB must not engage in discriminatory or differential pricing in products or services offered to other PSBs or CBN-licensed institutions.

The CBN however retained the minimum capital of PSBs at N5bn.

About Bukola Olanrewaju

Check Also

Stanbic IBTC Holdings Plc, is seeking the approval of the Central Bank of Nigeria (CBN) to operate in the country’s financial technology (fintech) industry.

Stanbic IBTC Seeks CBN Licence for Fintech Subsidiary

One of the respected financial institutions in Nigeria, Stanbic IBTC Holdings Plc, is seeking the …

Leave a Reply

Your email address will not be published. Required fields are marked *