CBN issues draft regulations for indirect participation in payment system

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IN its bid to ensure the development and an efficient and effective payment system in the country, the Central Bank of Nigeria (CBN), has issued draft regulations to guide indirect participants in the payment system.

The document listed indirect participants in the payment system to include: merchant banks, primary mortgage banks, microfinance banks, development finance institutions, mobile money operators and any other financial institutions as may be approved by the CBN.

The regulation, the CBN said, is to standardize their operations, having realized their critical role in driving financial inclusion and the need to effectively integrate them into Nigerian payment system.

Besides standardizing their operations, the exposure draft said the regulation provides framework for the clearing and settlement of indirect participants payment instruments through settlement banks, while strengthening them for effective contribution to digital financial services in the country.

To qualify, the indirect participant is required to have a satisfactory risk-based rating from the apex bank, in addition to securing a letter of recommendation from its settlement bank, signed by the Chief Risk Officer and an executive director of the settlement bank.

The apex bank also issued draft guidelines for the Nigeria Uniform Bank Account Number (NUBAN) scheme, which it said follows the need to expand the scope of the original guidelines issued eight years and three months ago in August 2010 by including players in the Other Financial Institutions (OFIs) space.

The reissuance of the guideline, it added, followed the success of the scheme across Deposit Money Banks and the increasing role of the OFIs in the electronic payment space.

A circular accompanying the draft, dated November 6, 2018, signed by Sam C. Okojere, Director, Payment System Management Department of the CBN, said all comments must reach his office on, or before November 26, 2018.

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