This was revealed in a press release signed by Uro Ukpanah, the Company Secretary, titled “THE CENTRAL BANK OF NIGERIA GRANTS FINAL APPROVAL FOR MOMO PAYMENT SERVICE BANK LIMITED TO COMMENCE OPERATIONS.”
MTN Nigeria and Airtel Africa, Nigeria’s leading telecommunications companies, received “Approval in Principle” (AIP) from the Central Bank of Nigeria to operate as Payment Service Banks in November 2021.
“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,” MTN said in a statement.
MTN did not specify a start date for operations, but stated that “the date of commencement will be communicated to the CBN in accordance with its requirements.”
“MTN Nigeria affirms its commitment to the CBN and the Federal Republic of Nigeria’s financial inclusion agenda, and we are excited at this opportunity to support its realization,” it added.
The primary goal of issuing PSB licenses, according to the apex bank guidelines, is to increase financial inclusion, particularly in rural areas, and to facilitate transactions.
“To improve financial inclusion in rural areas by expanding 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 secure technology-driven environment,” the CBN stated.
PSBs are expected to operate in rural areas and in areas where Nigerians lack bank accounts. They are also required to have at least 50% of physical access points (also known as kiosks) in rural areas.
ATMs may be operated by PSBs in some of their locations. Customers can withdraw cash as a result of this. The main difference between a conventional commercial bank and a PSB is that both are allowed to accept client deposits and invest a portion of those deposits in short-term CBN or FG products.
The main distinction is that, whereas deposit money banks (e.g., commercial banks) can make loans and advances, PSBs cannot.
PSBs can also transfer some of their excess cash to any deposit money bank.
