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CBN Sets N2Bn as Capital Requirement for Fintechs

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Central Bank of Nigeria (CBN) has set capital benchmarks for firms involved financial technology and payment operations (Fintechs).

CBN Sets N2Bn as Capital Requirement for Fintechs

Those in the top category, dealing with switching and processing, as well as mobile money operation, will have a N2 billion shareholders’ funds unimpaired by losses, the regulator announced.

According to a document conveying the guidelines published on the bank’s website on Monday, six categories of payment operators were newly approved by the CBN.

They include those involved in switching and processing, mobile money operators, Payment Solution Services (PSS), Payment Terminal Service Provider (PTSP), Payment Solution Service Provider (PSSP) and Super Agent licenses respectively.

The top category will escrow refundable N2 billion into a CBN account. The payment must be made in full single lump sum. Escrowed funds are to be invested in treasury bills, subject to availability of treasury instruments, which would be refunded accordingly.

For PSS, the CBN said an escrow of refundable N250 million must be deposited with the CBN, while for entities applying for the three licences will e: PSSP – N100 million, PTSP – N100 million, and Super Agent – N50 million.

The same conditions as the first category apply but with varying amounts.

“All written applications should be addressed to the Director, Payments System Management Department, Central Bank of Nigeria, Abuja, accompanied by evidence of payments of application fee and other documentary requirements,” the CBN said.

For all of the aforementioned licences, the apex bank said all applicants would be required to pay an application and licensing fee of N100,000 (non-refundable) to the CBN, while a licensing fee of N1 million is to be paid before the issuance of the final licence, if successful.

Nigeria has seen a rise of fintech in recent years and has produced some of Africa’s most notable payment platforms.

The best known are Flutterwave, Paystack and Interswitch.

The companies have raised billions of dollars in funding, but some analysts have raised concerns about the regulation of the novel sector constraining innovation in some ways.

 


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E-Financial

NDIC Gets Court Order, to Wind Down 96 Microfinance, Mortgage Banks

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Nigeria Deposit Insurance Corporation (NDIC) has said that it has obtained Winding up Orders for 96 out of 183 microfinance and primary mortgage banks whose licenses were revoked by the Central Bank of Nigeria (CBN) in May 2023.

NDIC Gets Court Order, to Wind Down 96 Microfinance, Mortgage Banks

Bello Hassa, managing director, NDIC, stated this at a sensitisation seminar for Judges of the Federal High Court in Lagos organised by the NDIC, to enlighten the judiciary on the intricacies of the banking industry.

Hassan said, “As at date, the Corporation had obtained Winding up Orders for 96 out of 183 Micro Finance and Primary Mortgage Banks whose licenses were revoked by the CBN in May 2023, in less than one Year of revocation.”

He added that the NDIC was committed to fulfilling its mandate of protecting depositors through bank supervision, failure resolution and liquidation so as to boost confidence in the financial system.

Speaking on the role that the judiciary plays in the fulfillment of the mandate, Hassan said, “We recognise the judiciary as one of our critical stakeholders. With this, when cases are brought before them, they can receive accelerated hearing and proclamation of Justice.”

Citing some of the achievements from previous editions of the seminar, Hassan said that instances where liquidation-related litigations experienced delays were reduced.

 

 

 


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CBN Finally Makes U-turn, Withdraws Circular on Cybersecurity Levy

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Central Bank of Nigeria (CBN) has withdrawn its earlier circular directing financial institutions to implement the national 0.5 per cent cyber security levy after the policy was largely resisted.

CBN Finally Makes U-turn, Withdraws Circular on Cybersecurity Levy

The withdrawal of the circular was announced via a statement signed by Haruna Mustafa, director, Financial Policy and Regulation, Department and Chibuzo Efobi, director, Payment System Management Department.

The apex bank confirmed the suspension in a circular issued on May 17, 2024 with reference number PSMD/DIR/PUB/LAB/017/005 addressed to commercial banks, mobile money operators, and other financial institutions.

In an earlier circular issued on May 6, 2024 with reference PSMD/DIR/PUB/LAB/017/004, the bank mandated financial institutions to charge a 0.5 per cent levy on all electronic transactions.

President Bola Tinubu last week ordered the suspension of the National Cybersecurity levy.

 

 

 

 

 


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ABCON, SEC Partner on Digital Currency P2P FX Sector Harmonization

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The Association of Bureau De Change Operators of Nigeria (ABCON) has called for the Securities and Exchange Commission (SEC) guidance and collaboration in harmonising the peer-to-peer forex sector in the country.

At an official courtesy visit to the newly appointed SEC Director-General, Dr. Timi Agama, the President of Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, who congratulated the SEC D-G on his appointment, observed that SEC regulates the sector that continues to threaten the existence of BDCs in Nigeria through online virtual transactions platforms which give access to millions of Nigerians to trade in foreign exchange without trace and accountability.

He also explained that ABCON has invested in requisite technology to ensure the continued existence of the business and the preservation of the integrity of the sub-sector, stressing that the future of BDC’s business was digital currency. The ABCON boss said that the meeting with the SEC DG and his executive board was a follow up to an earlier online virtual consultation.

Gwadabe explained that ABCON, the umbrella body for all licensed retail foreign exchange dealers, was established in 1991 to liaise with regulators, relevant stakeholders and security agencies for a transparent retail end forex market.

Gwadabe said: “As at today, there are over 34 million Nigerians dealing in digital currency and the number is rising by about nine percent with a huge market of $9 billion annually. There are thousands of multichannel virtual currency FX platforms and none is indigenous to Nigeria, adding that P2P represents individual-to-individual transaction.

“To automate the entire foreign exchange retail market, ABCON has partnered with the Commodities Exchange Board in building the platform knowing that they have sources of foreign exchange. ABCON is willing to work with SEC towards achieving full automation of the retail end of the foreign exchange market in Nigeria.

 


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