CENTRAL Bank of Nigeria (CBN) has issued guidelines for licensing and regulation of activities of Payment Service Holding Companies (PSHC) in the country.
This was disclosed in a circular issued by the apex bank to all deposit money banks, payment service providers and other financial institutions in the country over issuance of guidelines for licensing and regulation of payment service holding companies in Nigeria.
This is after CBN told companies that wants to provide mobile money service to set up a PSHC structure to delineate the activities of the subsidiaries.
The circular reads: “The CBN hereby issues the Guidelines for Licensing and Regulation of Payments Service Holding Companies in Nigeria to facilitate the understanding of regulatory requirements for operations of a Payment Service Holding Company (PSHC) in Nigeria.
“All stakeholders are required to ensure strict compliance with these Guidelines and all other regulations.”
CBN also stated that 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.”
The guidelines show clear definition of the 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.”
However, it prohibited PSHCs from undertaking certain activities like the establishment, divestment and closure of subsidiaries, without the prior written approval of the CBN.
PSHCs are also being restricted from holding equities in financial and technological subsidiaries that facilitate and enhance creative digital finance service.