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CBN stipulates N5 bln capital base for Payment Service Bank

By on August 27, 2020 0 137 Views

By Samuel Bankole

The Central Bank of Nigeria (CBN) on Thursday rolled out an amended guideline for the establishment of Payment Service Banks (PSBs) to provide banking service in the rural areas of the country.
In the guidelines, the CBN stipulates a minimum of N5 billion capital base for the promoters of the PSBs, which are expected to operate in areas that have no access to financial services in the country.
FSBs, the CBN said shall Issue debit and pre-paid cards on its name; operate electronic wallet; render financial advisory services; Invest in FGN and CBN securities, and carry out such other activities as may be prescribed by the CBN from time to time.

READ GUIDELINES: GUIDELINES FOR LICENSING AND REGULATION OF PAYMENT SERVICE BANKS IN NIGERIA

“Payment Service Banks shall: i. Operate mostly in the rural areas and unbanked locations targeting financially excluded persons, with not less than 25% financial service touch points in such rural areas as defined by the CBN from time to time,” the CBN said in the guidelines.
To qualify as a PSB, the promoter shall apart from the N5 billion minimum capital paid N2 million for non-refundable licensing fee and applications fee of N0.5 million to the CBN.
“The Payment Service Banks shall use the words “Payment Service Bank” in its name to differentiate it from other banks.

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“Furthermore, the name of a PSB shall not include any word that links it to its parent company,” the regulatory bank stated in the guidelines.”
The key objective of setting up PSBs, the CBN said 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 highvolume low-value transactions in a secured technology-driven environment.

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The key objective of setting up PSBs, the CBN said 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.
The regulator said it was in furtherance of its mandate to promote a sound financial system in Nigeria and the need to enhance access to financial services for low income earners and unbanked segments of the society, that he has release the guidelines for the establishment of PSBs.
The guidelines also made provisions for the source of fund, which allows the banks to collect deposit and participate at the interbank market, sell foreign exchange and

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