On 27 August 2020, the Central Bank of Nigeria (the “CBN”) issued the revised Guidelines for Licensing and Regulation of Payment Service Banks (“PSBs”) in Nigeria (the “Revised Guidelines”).
In order to leverage on technology to promote its mandate of financial inclusion, the CBN had earlier issued the 2018 Guidelines for Licensing and Regulation of Payment Service Banks in Nigeria (the “2018 Guidelines”). The CBN stated that the Revised Guidelines were issued as a response to market developments that have occurred since the issuance of the 2018 Guidelines.
There have been no amendments to the mandatory financial requirements for operation as a PSB and the licensing documents/information requirements as stated under the 2018 Guidelines.
One of the changes introduced by the Revised Guidelines is the inclusion of switching companies as eligible promoters. Under the 2018 Guidelines, switching companies, who already have data of financial system operators, were restricted from owning PSBs in order to avoid conflicts of interest. By this amendment, switching companies can now own PSBs.