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This was published in a press release and signed by Uro Ukpanah, the Company Secretary, read, “THE CENTRAL BANK OF NIGERIA GRANTS FINAL APPROVAL FOR MOMO PAYMENT SERVICE BANK LIMITED TO COMMENCE OPERATIONS”. The press statement began by announcing that, “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.” However, the company did not indicate when operations would start but affirmed that “The date of commencement will be communicated to the CBN by its requirements.” It further stated “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,”
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The Idea Behind This Move According to the CBN guidelines, the fundamental objective of granting PSB licenses is to increase financial inclusion, especially in rural areas and facilitate transactions. According to CBN, this is, “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,”
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- PSBs establishment aims to operate in rural regions and in areas where Nigerians do not have bank accounts. They are also required to have at least 50% physical access points (sometimes known as kiosks) in rural areas.
- PSBs may also establish and conduct ATM services in some of their locations. This will facilitate financial transactions such as cash withdrawals by customers.
- The main similarity between a conventional commercial bank and a PSB is that both are licensed to accept client deposits and to invest a portion of those deposits in short-term CBN or FG products.
- On the other hand, PSBs are not authorized to provide loans and advances compared to traditional commercial banks.
- Finally, PSBs can transfer some of their cash overflows to any deposit money bank of their choice.
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