Connectley Naija News
MTN has received final approval from the Central Bank of Nigeria (CBN) to operate as Momo Payment Service Bank Limited (Momo PSB).
This was revealed in a press release signed by Uro Ukpanah, the Company Secretary, captioned “THE CENTRAL BANK OF NIGERIA GRANTS FINAL APPROVAL FOR MOMO PAYMENT SERVICE BANK LIMITED TO COMMENCE OPERATIONS”
Connectley Naija News recalls MTN Nigeria and Airtel Africa, two of Nigeria’s largest telecommunications firms, got “Approval in Principle” (AIP) from the Central Bank of Nigeria to operate as Payment Service Banks in November 2021.
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.