BusinessCBN Issues Revised Regulatory Framework For Agent Banking

CBN Issues Revised Regulatory Framework For Agent Banking

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The Central Bank of Nigeria (CBN) has issued the Exposure Draft of Regulatory Framework for Agent Banking in the country.

The CBN said the publication was In exercise of its statutory powers for the maintenance of adequate and reasonable financial services to the public, adding that the document aims to regulate the operation of agent banking in the country.

The CBN defined Agent Banking as the use of third parties for the provision of banking and other financial services to the public.

It said the operations of agent banking has enabled banks and other financial institutions to extend their services to locations where they may not have physical presence, adding that the agent banking initiative in Nigeria has proved to be a viable tool for achievement of the financial inclusion targets set for the country.

The apex bank noted that the exponential growth in the number of agent banking operators and the meaningful impact on the financial inclusion strategy necessitated the need to review the agent banking guidelines.

“Over the years, the agent banking initiative has resulted in the ubiquity of financial services agents across Nigeria, resulting in a significant and growing portion of financial transactions being conducted through the agents. This has necessitated the review of agent banking regulations to streamline activities in agent banking while ensuring that appropriate risk mitigation measures are taken by stakeholders,” the Bank said in the document published on its Website Thursday, March 9, 2023.

The registration requirements include the explicit statement that agents shall not be allowed to charge any fees directly

to customers and that the details of remuneration for the agent shall be specified in the contract between the agent and the principal.

“Measures to mitigate risks associated with agent banking services include, at the minimum, limits on customer transactions, cash management, cash security, security of agent premises and insurance policies.

“Explicit statement that FIs and their agents shall fully comply with AML/CFT/CPF and KYC requirements” the document stated.

The guideline excludes faith-based, and non-for-profit and other non-governmental organisations from the scheme.

“Any entity, which is faith-based or not-for-profit, a non-governmental organization, an educational institution, bureau-de-change, or any other entity which, under any applicable law is not allowed to carry on profit-making business shall not engage in agent banking as an agent.

“Any entity, which is subject to any regulatory authority under any written law or is a public entity, shall obtain the consent of the regulatory authority or the appropriate oversight body or authority prior to being appointed an agent.”

The guidelines maintained the oversight functions of the CBN over the agent banking activities to ensure they operate within the laid down rules.

It said, “Notwithstanding the responsibility of FIs to monitor and supervise their agents, the CBN may at any time, exercise regulatory and supervisory powers under BOFIA and CBN Act and may request for such data or information or carry out such inspection as it deems necessary.”.

Financial institutions and their agents shall ensure full compliance with extant laws and regulations on the combating money laundering and illicit fund activities as provided in extant laws.

“In fulfillment of AML/CFT/CPF requirements, FIs and their agents shall comply with the requirements of the Money Laundering (Prohibition) Act, 2022 and Financing of Terrorism (Prevention & Prohibition) Act 2022 and relevant extant AML/CFT/CPF regulations,” the exposure draft provided in the guidelines.

About the Author

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Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.

Anthony Awunor, THEWILLhttps://thewillnews.com
Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.

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