MTN gets final approval from CBN, five months after AIP
By Jeph Ajobaju, Chief Copy Editor
MTN has received from the Central Bank of Nigeria (CBN) final approval to operate as a Momo Payment Service Bank (Momo PSB), five months after the telecom market leader got Approval in Principle (AIP).
Both MTN and Airtel its next competitor received AIP from the CBN last November to operate as PSBs in addition to their mobile telecom business of voice and data services.
“MTN Nigeria Communications PIc (MN Nigeria) announces the receipt of a letter dated 8 April 2022 from the CBN addressed to Momo PSB conveying final approval to commence operations,” Company Secretary Uro Ukpanah said in a statement.
“The date of commencement will be communicated to the CBN in accordance with its requirements.
“MTN Nigeria affirms its commitment towards the financial inclusion agenda of the CBN and the Federal Republic of Nigeria and we are excited at this opportunity to support its fulfilment.”
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CBN guidelines for PSBs
The CBN clarifies that PSBs are different from, and cannot compete with, commercial banks – as specified in the operational guidelines part of which are reported below by Nairametrics.
- The key objective of issuing PSB licences is to boost financial inclusion, especially in rural areas and facilitate transactions.
- “To enhance financial inclusion in rural areas by increasing access to deposit products and payment/remittance services to small businesses, low-income households and other entities through high-volume low-value transactions in a secured technology-driven environment,” the CBN said.
- PSBs are to function in rural regions and in areas where people do not have bank accounts. They are to have at least 50 per cent physical access points (kiosks) in rural areas.
- PSBs may operate ATMs in some locations for their customers to withdraw cash.
- Both commercial banks and PSBs can accept client deposits and invest a portion of those deposits in short-term CBN or FG products.
- But PSBs cannot grant loans and advances, only commercial banks can.
- PSBs can transfer some of their excess cash to any commercial bank of their choice.
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