The Central Bank of Nigeria (CBN) has granted MTN the final approval to operate as Momo Payment Service Bank Limited (Momo PSB).
This was disclosed in a press release titled “THE CENTRAL BANK OF NIGERIA GRANTS FINAL APPROVAL FOR MOMO PAYMENT SERVICE BANK LIMITED TO COMMENCE OPERATIONS” signed by Uro Ukpanah, the Company Secretary.
In November 2021 Nigeria’s leading telecommunications companies MTN Nigeria and Airtel Africa received an “Approval in Principle” (AIP) from the Central Bank of Nigeria to operate as Payment Service Banks.
Read: CBN fines 3 more Nigerian banks N514 million for facilitating cryptocurrency transactions
What MTN is saying
The statement by MTN reads, “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 did not specify when operations would start but stated that, “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,” it added.
Read: Reps urge the CBN to reinforce the use of coins as legal tender
What you should know
- According to the apex bank guidelines, the key objective of issuing PSB licenses 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 had stated.
- PSBs are expected to function in rural regions and in areas where Nigerians do not have bank accounts. They are also expected to have at least 50% physical access points (sometimes known as kiosks) in rural areas.
- PSBs may also operate ATMs in some of their locations. This enables their customers to withdraw cash. The main similarity between a conventional commercial bank and a PSB is that both are permitted to accept client deposits and to invest a portion of those deposits in short-term CBN or FG products.
- While, the main distinction is that, whereas deposit money banks (e.g., commercial banks) are permitted to make loans and advances, PSBs are not.
- Furthermore, PSBs can transfer some of their excess cash to any deposit money bank of their choosing.
Good