The Central Bank of Nigeria (CBN) has authorised Payment Service Banks (PSBs) to sell foreign currencies (forex) realised from inbound cross-border remittances (personal) to licensed foreign exchange dealers.
The apex bank also set N5 billion as the minimum capital requirement for PSBs, which are expected to begin full operation soon.
These are directives were contained in the guideline for PSBs operations released by the apex bank during the weekend. CBN said PSBs are to accept deposits from individuals and small businesses, which shall be covered by the deposit insurance scheme and carry out payments and remittances (including inbound cross-border personal remittances) services through various channels within Nigeria.
The guidelines, signed by CBN’s Director, Financial Policy and Regulation Kelvin Amugo, said PSBs shall maintain not less than 75 per cent of their deposit liabilities in CBN securities, Treasury Bills (TBs) and other short-term federal government debt instruments at any point in time.
“PSBs shall have the privilege to make their investments from the CBN window. All funds in excess of the PSB’s operational float should be placed with DMBs. PSBs shall participate in the payment and settlement system and have access to the inter-bank and the CBN collateralized repo window for its temporary liquidity management,” it has said.
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.
Telecom firms, banking agents, retail chains and postal services can apply for licenses to become payment banks. To do so they must set up a separate company for it with a minimum capital of N5 billion and run it as an independent entity from their existing operations. The bank has granted three licenses so far to 9PSB, a unit of local telecom firm, 9mobile, and two others.
Speaking on the vision of 9PSB’s entrant into the Nigerian financial sector, the CEO of 9mobile, Mr. Alan Sinfield, stated that there’s a huge potential in the market and 9PSB is strategically positioned to expand its operations into financial services.
He stated that “We are happy to be the first Payment Service Bank to provide all Nigerians with access to banking services and open up a digital world of possibilities to improve everyday lives. We know that this new development will further improve the country and the people going forward. In 2018, 9mobile partnered with Nigerian bank, UBA to roll out 9Pay, a mobile payments solution while also pushing for a fintech license. We are delighted that we have now secured finale approval for a Payment Service Bank.”
In his own reaction, the CFO of 9mobile, Mr. Phillips Oki stated that “the financial inclusion that 9PSB will provide will be an enabler to achieving unparalleled benefit in everyday transactions.
The *990# allows Nigerians to perform all financial transactions including utilities payment from the comfort of their phones and homes on any mobile network at no charge.
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