Banks to stop non-deposit financial institutions from transfer list in line with CBN Policy
NIGERIA, Dec. 7 – Nigeria commercial Banks have been requested to disconnect Switches, Payment Solution Service Providers, and Super Agents from the Nigeria Inter-Bank Settlement System (NIBSS) Instant Payment Outwards System.
The NIBSS made this known in a circular with Reference number, Ref: NIBSS/BD/NI/PO/005/051223 and dated December 5, 2023, sent to all banks.
In a statement credited to the national payment infrastructure company, the listing of non-deposit-taking financial institutions as beneficiaries is in contravention of the Central Bank of Nigeria (CBN) guideline on electronic payment.
The statement read in parts, “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.”
The statement emphasized that while switches, PSSPs, and SAs may process outward transfers as inflows to Banks, they “are not to receive inflows as their licenses do not permit them to hold customers’ funds.”
“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),” the statement added.
According to the CBN policies and guidelines to financial institutions, to operate in Nigeria’s payment ecosystem, operators must obtained at least one of the following licences from the CBN, Switching and Processing; Mobile Money Operations; Payment Solution Services; and Regulatory Sandbox. Only MMOs can hold customer funds, according to the CBN.
To also assure depositors of the safety of their deposit, it also important for the financial institution to get the cover of NDIC insurance.
