NEWS UPDATE: MTN, AIRTEL GET CBN’S APPROVAL TO OPERATE PAYMENT SERVICE BANK
By: Emmanuel Adefeso ESQ
The Central Bank of Nigeria (CBN) has granted approval in principle to MTN and Airtel to operate payment service bank (PSB) across the country, aimed at further driving financial inclusion in Nigeria.
Announcing the approval, 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 4 November 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 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 therefore affirmed its commitment towards the financial inclusion agenda of the CBN and the federal republic of Nigeria to continue to explore means whereby it can contribute to its fulfillment”.
Also, Airtel announced the approval CBN granted it to operate PSB, through a statement signed by the Group Company Secretary, Simon O’Hara, said: “Airtel Africa, with presence in 14 countries across Africa, announces that its subsidiary SmartCash 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.”
It would be recalled that the CBN had in the last quarter of 2018 unveiled the operational guidelines for PSBs. Therefore, the approval in principle granted to MTN and Airtel are in furtherance of the CBN’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.
Therefore 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. Indeed, the operation of payment service bank (PSB) across the country will undoubtedly enhance financial inclusion in rural areas by increasing access to deposit products and payment/remittance services to small businesses, low-income households and other entities through high-volume low-value transactions in a secured technology-driven environment.
Disclaimer: This news update is intended only to provide general information and does not by itself constitute or serve as legal advice. For further information, we are available to provide detailed legal advice. For more information contact us on info@asalawpractice.org or call 0908 482 0000, 0806 749 8777