MTN Gets Final Nod From CBN to Operate Banking Services
- Nigeria and Africa's top telecommunication company, MTN has gotten a final approval to operate a Payment Service Bank in Nigeria
- The Company in a statement signed by its secretary said that it got the letter from the Central Bank of Nigeria and addressed to Momo PSB which shall be the name of the new bank
- PSBs operate limited banking services in rural areas with little or no banking services in order to drive financial inclusion
Nigeria’s apex bank, the Central Bank of Nigeria has given its final nod to telecommunication giant, MTN to begin full banking operations which shall be known as Momo Payment Service Bank (PSB).
The disclosure was made known in MTN’s press release which was signed by the company’s secretary, Uro Ukpanah, according to a Nairametrics report.
Source: Getty Images
In November last year, the top telco in Africa along with Airtel Africa got approvals in principle from the CBN to float PSB in Nigeria.
The company, in the press release, stated that the approval from the CBN came on April 8, 2022, and was addressed to Momo PSB which conveys the CBN's final nod to Momo PSB to start operations.
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MTN and Airtel joins 9PSB, owned by 9Mobile and the PSB owned by any telecoms company to operate in Nigeria as PSBs, thereby taking on the traditional banks whose presence in the rural areas have been scanty.
MTN's reaction
The company did not tell when it will commence the operations but said the date will be communicated to CBN in accordance with its requirements.
The company stated that it will go on with its commitment to financial inclusion in Nigeria.
The CBN’s guidelines stipulate that the reason for giving licenses to PSBs is to increase financial inclusion in the areas with no or limited banking operations.
Functions of PSBs
PSBs are to ensure that they function in rural areas where there is limited or no access to robust banking operations. The CBN has been hammering on driving final inclusion in Nigeria where more than 50 per cent of the population are without bank accounts.
Data from Statista says that there are about 79.3 million active bank accounts as at 2019 in comparison to 2016, which represents a 15 million increase.
In the same year, the number of active bank customers added up to over 73 million. But analysts say this is insufficient in comparison to the over 200 million population of the country.
Also, part of the guideline from the Central Bank of Nigeria said the PSBs are expected to have 50 per cent physical access points, that is kiosks in the areas where they operate so as to drive financial inclusion and widen the financial dragnet.
The PSBs may also operate ATM services in some locations to allow their customers to have access to cash.
CBN Grants MTN, Airtel Licenses to operate as payment service banks, after certain conditions are met
Legit.ng reports that MTN Nigeria and Airtel Africa Plc have been gave preliminary approval to establish a payment service bank (PSB) in Nigeria.
The two telecom firms revealed this in regulatory filings on the Nigerian Exchange Limited (NGX) on Friday, 5 November 2021.
MTN and Airtel, as a PSB operator, will provide financial services to users using their phone numbers, with a focus on low-income earners and those who do not utilize banks or banking institutions for transactions.
Source: Legit.ng
