The Central Bank of Nigeria (CBN), yesterday, granted approval in principle for Payment Service Bank (PSB) licenses to MTN Nigeria and Airtel Africa.
The decision to grant PSB approvals to the two major telecommunications firms in Nigeria is in line with the apex banks objective of enhancing financial inclusion and the development of the payment system through a secured technology-driven environment
MTN Nigeria, in a statement obtained from the Nigerian Stock Exchange (NSE) website, said it received the approvals on November 4, 2021, from the CBN for a license application for the proposed MoMo Payment Service Bank Limited.
According to the statement, the approval was the first step in the process towards a final approval, subject to the fulfillment of certain conditions as stipulated by the CBN.
“The decision to issue a final approval is firmly within the regulatory purview of the CBN and we respect their right and judgment in that regard.
“MTN Nigeria affirms its commitment towards the financial inclusion agenda of the CBN and the Federal Republic of Nigeria and continues to explore means whereby it can contribute to its fulfillment. While we look forward to the eventual grant of a final PSB license, we will continue to communicate material information in accordance with regulatory obligations and guidelines,” MTN said.
In the same vein, Airtel Africa, in a statement, announced that its subsidiary SMARTCASH Payment Service Bank Limited (“Smartcash”) has been granted approval in principle to operate a payment service bank business in Nigeria.
The statement read: “I am very pleased that Smartcash has been granted an approval in principle to operate a service bank business in Nigeria. We will now work closely with the Central Bank to meet all its conditions to receive the operating licence and commence operations,” CEO, Airtel Africa, Segun Ogunsanya, said.
Ogunsanya added: “The final operating licence will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services. I am looking forward to working closely with the government, the Central Bank and traditional financial institutions to expand financial inclusion and meet the evolving needs of our customers and the economy.”
According to the company, the final approval is subject to the Group satisfying certain standard conditions within six months.
The CBN had in the last quarter of 2018 unveiled the operational guidelines for PSBs. The move was in furtherance of the Bank’s mandate of promoting a sound financial system and enhancing access to financial services for low income earners and unbanked segments of the society.
The PSBs are to operate mostly in the rural areas and unbanked locations, targeting financially excluded persons, with not less than 25 per cent financial service touch points in such rural areas as defined by the CBN from time to time, the guidelines said.
According to the CBN, the key objective of setting up PSBs was 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.
They are to also enter into direct partnership with card scheme operators but such cards shall not be eligible for foreign currency transactions.
In addition, they are to deploy ATMs in some of these areas, deploy Point of Sale devices and be at liberty to operate through banking agents (in line with the CBN’s Guidelines for the Regulation of Agent Banking and Agent Banking Relationships in Nigeria).
