The Central Bank of Nigeria has issued guidelines for licensing and regulation of payments service holding companies in the country.
The CBN disclosed this in a circular dated August 3, 2021 and titled, ‘Circular to all deposit money banks payment service providers and other financial institutions on issuance of the guidelines for licensing and regulation of payments service holding companies in Nigeria’.
This is coming after the apex bank directed that companies that desired to provide mobile money services should set up a PSHC structure to clearly delineate the activities of the subsidiaries.
The circular read, “The CBN hereby issues the Guidelines for Licensing and Regulation of Payments Service Haiding Companies in Nigena to facilitate the understanding of regulatory requirements for operations of a payments service holding company in Nigeria
“All stakeholders are required to ensure strict compliance with these Guidelines and ail other regulations.”
According to the CBN, the guidelines cover payment activities of mobile money operations, switching and processing, payment solution services and any other activity as may be approved by the CBN.
It said, “The guidelines also provide clarity on the definition and structure of a PSHC, licensing requirements, ownership and control, corporate governance, permissible and non-permissible activities, as well as supervision.
“The PSHC can provide broad policy direction, shared services and/or enter into technical or management service contract with any of its subsidiaries, with the prior written approval of the CBN, in respect of the following areas: human resources services; risk management services; internal control services; compliance services; Information and Communication Technology; legal services; facilities (office accommodation including electricity, security, cleaning services in that accommodation); and any other services as may be approved by the CBN from time to time.”
It, however, prohibited PSHCs from undertaking certain activities such as the establishment, divestment and closure of subsidiaries, without the prior written approval of the CBN.
PSHCs are also restricted from holding equities in financial and technological subsidiaries that facilitate and enhance innovative digital financial services, except as listed in Section 5.2.