CBN to establish Payment Service Banks to drive financial inclusion

09 Oct 2018, 12:00 am
Financial Nigeria

Summary

The key objective of the PSBs is to enhance financial inclusion in rural areas by increasing access to deposit products and payment services.

Central Bank of Nigeria headquarters, Abuja

The Central Bank of Nigeria (CBN) is proposing the establishment of Payment Service Banks (PSBs) to enhance access to financial services for low income earners and the unbanked segments of the society.

The Exposure Draft Guideline for Licensing and Regulation of the PSBs was released on Sunday for comments and observations from the public. It can be accessed on the website of the CBN.

The key objective of the PSBs, according to the guideline, is to enhance financial inclusion in rural areas by increasing access to deposit products and payment services to small businesses, low-income households and other entities through high-volume low-value transactions in a secured technology-driven environment.

A non-refundable application fee of N500, 000, a N2 million licensing fee and a minimum capital base of N5 million are some of the licensing requirements.

According to the Chairman of the Board of Enhancing Financial Innovation and Access (EFInA), Segun Akerele, about 41 million Nigerians are financially excluded with majority in the northwest, northeast and northcentral parts of the country.

The apex bank seeks to ensure that 80 percent of bankable adults in Nigeria have access to financial services by 2020. Hence, it launched the National Financial Inclusion Strategy in 2012 with a view to reducing the exclusion rate to 20 percent by 2020.

The PSBs, in addition to their basic functions, will also establish automated teller machines (ATMs) in the areas they operate. They will also be at liberty to operate through banking agents, and establish coordination centres to control the activities of the various access points and banking agents.

“We would be pleased to receive comments on the draft guidelines through the Director, Financial Policy and Regulation Department, Central Bank of Nigeria, Abuja by Friday, October 19, 2018,” said Kevin Amugo, Director of Financial Policy and Regulation Department. “Softcopies of your comments may also be forwarded to cnwanja@cbn.gov.ng and magiwa@cbn.gov.ng.”


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