Cbn new guidlines on payment services banks

The Central Bank of Nigeria (CBN) has issued new guidelines for Payment Service Banks (PSBs) in Nigeria. The guidelines aim to provide a framework for the operation of PSBs in the country, which are designed to provide financial services to the underserved and unbanked population.

Here are the key highlights of the new guidelines:

Definition of Payment Service Banks

A Payment Service Bank is a type of financial institution that provides payment services, including the acceptance of cash deposits, payment of bills, and transfer of funds. PSBs are designed to provide financial services to the underserved and unbanked population, particularly in rural areas.

Eligibility Criteria

To be eligible to operate as a PSB, an applicant must:

  1. Be a limited liability company incorporated in Nigeria
  2. Have a minimum paid-up capital of N5 billion (approximately $13.6 million)
  3. Have a minimum of 5 years' experience in the financial services industry
  4. Demonstrate a strong business plan and financial projections
  5. Meet the CBN's fit and proper person test

Licensing Requirements

To obtain a license to operate as a PSB, an applicant must:

  1. Submit a comprehensive application to the CBN
  2. Pay a non-refundable application fee of N500,000 (approximately $1,360)
  3. Provide all required documents, including a business plan, financial projections, and proof of paid-up capital
  4. Pass a fit and proper person test

Services Offered

PSBs are authorized to offer the following services:

  1. Acceptance of cash deposits
  2. Payment of bills (e.g. electricity, water, and telephone bills)
  3. Transfer of funds (e.g. person-to-person, person-to-business, and business-to-business)
  4. Payment of government services (e.g. taxes, fees, and levies)
  5. Provision of mobile money services

Regulatory Requirements

PSBs are subject to the following regulatory requirements:

  1. Compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations
  2. Compliance with data protection regulations
  3. Maintenance of a minimum capital adequacy ratio of 10%
  4. Maintenance of a minimum liquidity ratio of 20%
  5. Submission of regular reports to the CBN

Other Requirements

PSBs are also required to:

  1. Establish a robust risk management framework
  2. Implement a comprehensive compliance program
  3. Provide training to staff on AML/CFT and data protection regulations
  4. Establish a complaints resolution mechanism
  5. Maintain a minimum of 50% of its board members as Nigerians

Effective Date

The new guidelines are effective from the date of publication, which is [insert date].

Conclusion

The new guidelines for Payment Service Banks in Nigeria aim to provide a framework for the operation of PSBs in the country, which are designed to provide financial services to the underserved and unbanked population. The guidelines are intended to promote financial inclusion and stability in the Nigerian financial system.