Post by Trade facilitator on Nov 10, 2021 15:38:16 GMT 1
The Central Bank Of Nigeria (CBN) Grants MTN, Airtel Approval In Principle To Operate Payment Service Bank (PSB) In Nigeria
After two years of waiting, the Central Bank of Nigeria (CBN) has eventually granted MTN and Airtel Approval for the same category of Licence in principle as was done to Globacom and UP services.
The essence of granting the licence is to further drive financial inclusion in Nigeria. The CBN has communicated the approval in principle to both MTN and Airtel.
It can be recalled that in 2020, the CBN granted final licences to 3 (three) Payment Service Banks (PSB) to start operation.
The final approval to the 3 Payment Service Banks to operate follows their compliance with the licencing requirements which were stipulated by the apex bank.
The 3 Payment Service Banks that were granted final approval by the CBN were Hope PSB, Moneymaster PSB and 9 PSB.
Payment Service Banks are a new category of bank with smaller scale operations and the absence of credit risk and foreign exchange operations. In addition to operating current and savings accounts, they can also offer payments and remittances services, issue debit and prepaid cards; deploy ATMs and other technology-enabled banking services.
MTN in a statement signed by the Company’s Secretary, Uto Ukpanah, said “MTN Nigeria Communications Plc (MTN Nigeria) as promoter, received an Approval in Principle (AIP) dated November 4, 2021 from the Central Bank of Nigeria (CBN) for a licence application for the proposed MoMo Payment Service Bank Limited. This is the first step in the process towards a final approval, subject to the fulfillment of certain conditions 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.”
Airtel also announced the approval CBN granted it to operate a PSB, through a statement signed by the Group Company Secretary, Simon O’Hara, and said “Airtel Africa with presence in 14 countries across Africa, announces that its subsidiary Smartcard Payment Services Bank Limited has been granted approval in principle to operate a Payment Service bank Business in Nigeria. Final approval is subject to the Group satisfying certain standard conditions within six months.”
The CEO of Airtel Africa, Segun Ogunsanya, when commenting on the approval said “I am very pleased that Smartcard 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. 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 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.”
Recall that before now, MTN had gotten a Super-Agent Licence from the CBN to carryout financial transactions, using its agent network.
The following are activities that can be performed by the companies under the Approval In Principle (AIP) licence:
Accept deposits from individuals and small businesses, which shall of course be covered by the Deposit Insurance Scheme
Carryout payments and remittances (including inbound cross-border personal remittances) services through various channels within Nigeria
Sale of foreign currencies realized from inbound cross-border personal remittances to authorized foreign exchange dealers
Issue debit and prepaid cards on its name
Operate electronic wallet
Render financial advisory services
Invest in FGN and CBN securities
Carryout such other activities as may be prescribed by the CBN from time to time.
Apart from the above conditions, the PSB will and is intended to promote rural financial inclusion and requires that 25% of the financial services touch point by the operator must be in the rural areas.
With all these financial services coming on board, we believe that the rural folks will be taken care of with the current financial inclusion as was being done by the introduction of the POS machines and terminals.
We all can bear witness of the great service being offered by the POS operators in solving countless financial difficulties which could have overwhelmed the unbanked populations.
We wholeheartedly welcome the new banks.
After two years of waiting, the Central Bank of Nigeria (CBN) has eventually granted MTN and Airtel Approval for the same category of Licence in principle as was done to Globacom and UP services.
The essence of granting the licence is to further drive financial inclusion in Nigeria. The CBN has communicated the approval in principle to both MTN and Airtel.
It can be recalled that in 2020, the CBN granted final licences to 3 (three) Payment Service Banks (PSB) to start operation.
The final approval to the 3 Payment Service Banks to operate follows their compliance with the licencing requirements which were stipulated by the apex bank.
The 3 Payment Service Banks that were granted final approval by the CBN were Hope PSB, Moneymaster PSB and 9 PSB.
Payment Service Banks are a new category of bank with smaller scale operations and the absence of credit risk and foreign exchange operations. In addition to operating current and savings accounts, they can also offer payments and remittances services, issue debit and prepaid cards; deploy ATMs and other technology-enabled banking services.
MTN in a statement signed by the Company’s Secretary, Uto Ukpanah, said “MTN Nigeria Communications Plc (MTN Nigeria) as promoter, received an Approval in Principle (AIP) dated November 4, 2021 from the Central Bank of Nigeria (CBN) for a licence application for the proposed MoMo Payment Service Bank Limited. This is the first step in the process towards a final approval, subject to the fulfillment of certain conditions 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.”
Airtel also announced the approval CBN granted it to operate a PSB, through a statement signed by the Group Company Secretary, Simon O’Hara, and said “Airtel Africa with presence in 14 countries across Africa, announces that its subsidiary Smartcard Payment Services Bank Limited has been granted approval in principle to operate a Payment Service bank Business in Nigeria. Final approval is subject to the Group satisfying certain standard conditions within six months.”
The CEO of Airtel Africa, Segun Ogunsanya, when commenting on the approval said “I am very pleased that Smartcard 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. 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 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.”
Recall that before now, MTN had gotten a Super-Agent Licence from the CBN to carryout financial transactions, using its agent network.
The following are activities that can be performed by the companies under the Approval In Principle (AIP) licence:
Accept deposits from individuals and small businesses, which shall of course be covered by the Deposit Insurance Scheme
Carryout payments and remittances (including inbound cross-border personal remittances) services through various channels within Nigeria
Sale of foreign currencies realized from inbound cross-border personal remittances to authorized foreign exchange dealers
Issue debit and prepaid cards on its name
Operate electronic wallet
Render financial advisory services
Invest in FGN and CBN securities
Carryout such other activities as may be prescribed by the CBN from time to time.
Apart from the above conditions, the PSB will and is intended to promote rural financial inclusion and requires that 25% of the financial services touch point by the operator must be in the rural areas.
With all these financial services coming on board, we believe that the rural folks will be taken care of with the current financial inclusion as was being done by the introduction of the POS machines and terminals.
We all can bear witness of the great service being offered by the POS operators in solving countless financial difficulties which could have overwhelmed the unbanked populations.
We wholeheartedly welcome the new banks.
