CBN directs payment service banks to sell dollars

The Central Bank of Nigeria (CBN) has issued a supervisory framework for payment service banks(PSB).

Among other things, the framework allowed PSB operators to sell foreign currencies, particularly dollars, to authorised foreign exchange dealers.

The CBN framework also permitted the PSBs to provide payments and remittance services (including inbound cross-border personal remittances) through a variety of channels within Nigeria.

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These services would be covered by the deposit insurance scheme and would be available to both individuals and small businesses.

According to the framework, operators are expected to use technology to offer services that the unbanked population and those who live in remote areas of the nation can easily access.

The framework’s primary areas of focus are corporate governance, PSB risk management, and the security of funds for customers using Payment Service Banks’ products.

The PSBs are required to comply with relevant extant regulations and CBN’s prudential guidelines and circulars which are issued periodically.

According to the CBN, PSBs must target people who are financially excluded and operate primarily in rural and unbanked areas, with at least 25% of their financial service touch points occurring in these rural areas, as defined from time to time by the CBN.

Direct partnerships with card scheme operators are required of them. Such cards may also deploy ATMs in some of these areas, deploy Point of Sale equipment, and be free to operate through banking agents, but they shall not be eligible for foreign currency transactions.

The PSBs have also been given the go-ahead to launch agent networks with the CBN’s prior approval, reach out to customers through other platforms, such as electronic ones, and set up coordinating centers in groups of outlets to monitor and regulate the operations of the various financial service touch points and banking agents