Banks to disconnect non-deposit financial institutions from money transfer channels

Date:

December 8, 2023.

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Azonuchechi Chukwu.

The Nigeria Inter-Bank Settlement System (NIBSS) has directed banks to disconnect all non-deposit financial institutions from its transfer list.

The NIBSS gave this directive to the banks in a circular dated Tuesday, December 5, 2023, with Ref: NIBSS/BD/NI/PO/005/051223.

This means that banks must disconnect Switches, Payment Solution Service Providers and Super Agents from the NIBSS Instant Payment Outwards System.

The NIBSS in the circular made it known to the banks that the listing of non-deposit-taking financial institutions as beneficiaries is against the guidelines of the Central Bank of Nigeria (CBN) on electronic payment.

The circular reads: “This is to bring to your attention that listing non-deposit-taking financial institutions such as Switching Companies, Payment Solution Service Providers, and Super Agents as beneficiary institutions on your NIP funds transfer channels contravenes the CBN Guidelines on Electronic Payment of Salaries, Pensions, Suppliers, and Taxes in Nigeria dated February 2014.”

According to the national payment infrastructure company, while switches, PSSPs, and SAs may be permitted to carry out outward transfers as inflows to banks, they are not allowed to receive inflows.

The NIBSS added that this is because their licences do not permit them to hold customers’ funds.

“Another regulatory advice in this regard is the circular with the caption ‘Permissible Services and Products of PSSP Operation in Nigeria’, Ref: BPD/DIR/GEN/CIR/05/004 dated May 11, 2018″ it said.

“Consequent on the above, kindly delist all Switches, PSSPs, and SAs from your NIP Outward Transfer channels only (not inwards).”

The NIBSS also said that to be allowed to carry out operation in Nigeria’s payment ecosystem, operators must obtain at least a licence from the CBN.

The licences, it pointed out include Switching and Processing, Mobile Money Operations; Payment Solution Services; and Regulatory Sandbox.

The national payment infrastructure company said this is because it is only MMOs that can hold customer funds, as directed by the CBN.(www.naija247news.com).

Azonuchechi Chukwu
Azonuchechi Chukwuhttps://gravatar.com/azonuchechivchukwu
Azonuchechi Chukwu - Business Journalist at Naija247news.com Azonuchechi Chukwu is a seasoned business journalist contributing to the insightful coverage of economic and financial news at Naija247news.com. With a passion for unraveling the complexities of the business world, Azonuchechi brings a wealth of expertise and dedication to his role. As a Business Journalist, Azonuchechi specializes in providing comprehensive analyses of market trends, corporate developments, and economic indicators. His in-depth reports offer Naija247news.com readers a nuanced understanding of the forces shaping the Nigerian and global business landscapes. Azonuchechi Chukwu's commitment to journalistic excellence is evident in his ability to translate complex financial information into accessible and engaging narratives. Whether exploring stock market fluctuations, corporate strategies, or economic policies, he strives to deliver content that empowers readers with valuable insights. With an educational background in business and a keen interest in the intersection of finance and technology, Azonuchechi stays at the forefront of industry dynamics. His coverage extends beyond traditional financial reporting, encompassing the dynamic realms of fintech, entrepreneurship, and sustainable business practices. Azonuchechi Chukwu's work goes beyond the surface, aiming to foster financial literacy and awareness among Naija247news.com's audience. By demystifying economic complexities and shedding light on emerging opportunities, he plays a pivotal role in keeping readers well-informed in the fast-paced world of business. As Naija247news.com's Business Journalist, Azonuchechi Chukwu continues to make meaningful contributions to the platform's mission of delivering timely, accurate, and relevant business news to its diverse audience. His dedication to journalistic integrity and his ability to navigate the intricacies of the business realm make him an invaluable asset to the Naija247news.com team.

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