CBN has issued fresh guidelines for payments service holding companies.
News Online reports that the Central Bank of Nigeria, CBN, has issued guidelines for licensing and regulation of Payments Service Holding Companies, PSHCs, in the country.
BREAKING: Court Bans DSS And Malami From Arresting Sunday Igboho
The apex bank, News Online understands, disclosed yesterday in a circular to all Deposits Money Banks, Payment Service Providers, and Other Financial Institutions.
The guidelines, stated: “The regulation requires companies desirous of operating more than one licence category, to set up a PSHC, with activities of subsidiaries clearly delineated.
“This arrangement would prevent commingling of activities, facilitate management of risks and enable the CBN exercise adequate regulatory oversight on all the companies operating within the Group.
“The affected regulated payment activities are: Mobile Money Operations, Switching and Processing, Payment Solution Services and any other activity as may be approved by the CBN.”
BREAKING: Government Declares Thursday, August 12 As Public Holiday
On activities that are permissible and non permissible, the guidelines stated: “Except as listed in Section 5.2, the activities of the PSHC shall be restricted to the holding of equities in financial and technological subsidiaries that facilitate and/or enhance innovative digital financial services.
“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.
“Shared services shall be provided on arm’s length basis. Transactions in respect of such services shall require the consent of the Board of Directors of the subsidiary.
“A PSHC is prohibited from undertaking the following activities: Establishment, divestment and closure of subsidiaries, without the prior written approval of the CBN.
“Deriving or receiving income from sources other than as listed herein: Dividend income from its subsidiaries/associates; Income from shared services, where applicable; Interest earned from idle funds invested in government securities or placement with licensed financial institutions.
“Patents, royalties and copyrights; Profit on divestment from subsidiaries/associates; and any other source as may be approved by the CBN.”
