CBN Stops Payment Service Banks From Accepting Forex Deposits



The Central Bank of Nigeria (CBN) has stopped operators of Payment Service Banks (PSBs) from accepting foreign exchange deposits and any closed scheme electronic value (airtime) as a form of deposit or payment.


The new directive is contained in the apex bank’s revised guidelines for licensing and regulations of PSBs released on Thursday on its website.

In the new guidelines, which is the upgraded version of the circular the CBN issued on October 05, 2018 to all banks, telecommunications firms, Mobile Money Operators and banking agents among others, the CBN emphasized that PSBs are not allowed to grant any form of loans, advances and guarantees (directly or indirectly.)

The document, which was signed by Kevin Amugo, Director, Financial Policy and Regulation Department, CBN, added that the name of PSBs must not include any word that links it to the parent company.

Amugo said, “Despite several initiatives including the introduction of microfinance banking, agent banking, tiered know-your-customer requirements and mobile money operation (MMO) in pursuit of this objective, the inclusion rate remains below expectation.

“The CBN, in the circumstance and in collaboration with critical stakeholders in the digital financial ecosystem, such as the Nigerian Communication Commission, commercial banks, mobile money operators and telecommunication companies, have conducted several study tours of other jurisdictions that have made significant progress in driving financial inclusion.

“In view of the challenges to effective outreach to rural communities as well as the need to complement the services provided by other licensed entities, the CBN issues this regulation to provide for the licensing and operations of Payment Service Banks (PSBs) in Nigeria. 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 report said the Payment Service Banks will operate mostly in the rural areas and unbanked locations targeting financially excluded persons, with not less than 25 percent financial service touchpoints in such rural areas as defined by the CBN from time to time.

Comments are closed.