In its bid to enhance access to financial services for low income earners and unbanked Nigerians, the Central Bank of Nigeria (CBN), has come out with guidelines and regulations for Payment System Banks (PSBs) in the country.
According to a circular issued to all stakeholders and signed by Director, Financial Policy and Regulatory Department of CBN, Kevin Amugo, the move is part of efforts to complement services provided by other licensed entities.
The CBN stated further that the essence of the regulation was to leverage on technology to promote financial inclusion and enhance access to financial services to the rural poor, low income earners and financially excluded of the society.
The PSBs are expected to leverage on mobile and digital channels to enhance financial inclusion and stimulate economic activities at the grassroots through the provision of financial services.
The apex bank stated that “The key objective of setting up PSBs is to enhance financial inclusion by increasing access to deposit products and payment/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.”
Payment Service Banks are expected to operate mostly in the rural areas and unbanked locations targeting financially excluded persons, with not less than 25% financial service touch points in such rural areas as defined by the CBN from time to time; enter into direct partnership with card scheme operators. Such cards shall not be eligible for foreign currency transactions; deploy ATMs in some of these areas; and deploy Point of Sale device
The circulated stated further that the PSBs shall “be at liberty to operate through banking agents (in line with the CBN’s Guidelines for the Regulation of Agent Banking and Agent Banking Relationships in Nigeria); roll out agent networks with the prior approval of the CBN; use other channels including electronic platforms to reach-out to its customers; establish coordinating centres in clusters of outlets to superintend and control the activities of the various financial service touch points and banking agents; amongst others.
According to the CBN, the minimum capital requirements for PSBs are five billion or such other amount that the CBN may prescribe from time to time.
It would be recalled that the apex bank has, over the years, continued to be innovative in deepening the nation’s financial services sector.