Cbn new financial license

CBN (Central Bank of Nigeria) has introduced a new financial license, which is the Payment Service Bank (PSB) license. This license is designed to promote financial inclusion and provide access to financial services for underserved segments of the population.

The PSB license is a new category of license introduced by the CBN to enable non-bank entities to provide payment services, including payment acceptance, payment processing, and payment settlement. The license is designed to promote financial inclusion by providing access to financial services for individuals and businesses that are currently underserved or unserved by traditional banks.

Key features of the PSB license:

  1. Payment Services: PSBs are allowed to provide payment services, including payment acceptance, payment processing, and payment settlement.
  2. Limited Banking Services: PSBs are allowed to provide limited banking services, such as cash deposit and withdrawal, bill payment, and fund transfer.
  3. No Cash Withdrawal: PSBs are not allowed to provide cash withdrawal services.
  4. No Credit Facilities: PSBs are not allowed to provide credit facilities to customers.
  5. Minimum Capital Requirement: PSBs are required to have a minimum capital requirement of N5 billion (approximately $13.6 million).
  6. Licensing Requirements: PSBs must meet certain licensing requirements, including having a physical presence in Nigeria, having a minimum of 50% Nigerian ownership, and having a robust risk management framework.

Benefits of the PSB license:

  1. Financial Inclusion: The PSB license promotes financial inclusion by providing access to financial services for underserved segments of the population.
  2. Increased Competition: The PSB license increases competition in the financial services sector, which can lead to better services and lower prices for consumers.
  3. Job Creation: The PSB license can lead to job creation in the financial services sector.
  4. Economic Growth: The PSB license can contribute to economic growth by providing access to financial services for small and medium-sized enterprises (SMEs).

To obtain a PSB license, applicants must submit a comprehensive application to the CBN, which includes:

  1. Business Plan: A detailed business plan outlining the applicant's strategy, operations, and financial projections.
  2. Financial Statements: Audited financial statements for the past three years.
  3. Risk Management Framework: A robust risk management framework that outlines the applicant's risk management policies and procedures.
  4. Compliance with Regulations: A demonstration of compliance with relevant regulations and laws in Nigeria.

The CBN has set out specific guidelines and requirements for the PSB license, which can be found on its website.