Banks Will Remove Financial Institutions That Don't Accept Deposits From The Transfer List
Financial institutions that do not accept deposits will be removed from fund transfer channels says NIBSS
Nigerian banks have been instructed to disengage all non-deposit-taking financial entities from their Nigerian Interbank Payment (NIP) outward fund transfer channels
Banks are requested to remove Payment Solution Service Providers, Switches, and Super Agents from their list of recipients for outgoing payments or transfers by the Nigeria Inter-Bank Settlement System.
This was revealed to banks by the NIBSS in a recent circular with the reference NIBSS/BD/NI/P0/005/051223, dated December 5, 2023. The nation's payment system clarified that it is against the Central Bank of Nigeria's guidelines for electronic payment to name banking institutions that do not accept deposits as beneficiaries.
It stated, “This is to bring to your attention that listing non-deposit-taking financial institutions such as Switching Companies, Payment Solution Service Providers, and Super Agents as beneficiary institutions on your NIP funds transfer channels contravenes the CBN Guidelines on Electronic Payment of Salaries, Pensions. Suppliers, and Taxes in Nigeria dated February 2014.”
“It stressed that while switches, PSSPs, and SAS may process outward transfers as inflows to banks, they are not to receive inflows as their licences do not permit them to hold customers' funds.”
NIBSS added, “Another regulatory advice in this regard is the circular with the caption 'Permissible Services and Products of PSSP Operation in Nigeria', Ref: BPD/DIR/GEN/CIR/ 05/004 dated May 11, 2018. Consequent on the above, kindly delist all Switches, PSSPs, and SAs from your NIP Outward Transfer channels only (not inwards).”
Operators need to get at least one of the following licenses from the CBN in order to function inside Nigeria's payment ecosystem: Switching and Processing, Mobile Money Operations, Payment Solution Services, and Regulatory Sandbox. Regulations issued by the CBN in December 2020 state that client funds can only be held by MMOs that have a minimum capital share of N2 billion.
Enforcing this policy will ensure that Fintechs operating without a banking license are removed from bank fund transfer channels.
In other words, these platforms will be allowed to send money out to banks, but they won't be able to take money in. It's anticipated that the impacted Fintechs may look to obtain banking licenses so they can keep money.
No comments:
Leave comment here