The Central Bank of Nigeria (CBN) yesterday unveiled a guideline for agent banking in the country.
The guideline is in line with the powers conferred on the banking watchdog by Section 2 (d) of the CBN Act, 2007 and Section 57 (2) of the Banks and Other Financial Institutions Act (BOFIA), Laws of the Federation of Nigeria, 2004.
The statute empowers the CBN to issue guidelines for the maintenance of adequate and reasonable financial services to the public.
The objective of agent banking, it said, is to provide minimum standards and requirements for agent banking operations, enhance financial inclusion and provide for agent banking as a delivery channel for offering banking services in a cost effective manner.
Agent banking is the provision of financial services to customers by a third party (agent) on behalf of a licensed deposit taking financial institution and/or mobile money operator (principal).
The agent banks are expected to receive cash deposit and withdrawal, carry out bills payment (utilities, taxes, tenement rates, subscription etc.), payment of salaries, funds transfer services (local money value transfer), balance enquiry, generation and issuance of mini statement, collection and submission of account opening and other related documentation among others.
They are also to carry out cash disbursement and cash repayment of loans, cash payment of retirement benefits, cheque book request and collection, collection of bank mail/correspondence for customers, any other activity as the CBN may from time to time prescribe.
The applications for licence will be accompanied with board approval, document that will outline the strategy of the financial institution, including current and potential engagements, geographical spread and benefits to be derived among other factors.
Under the guideline, Super-Agents are described as agent networks that will establish a collection of outlets or franchise within its wide network of outlets that will be under its supervision and control.
The Sole Agent is expected to be a sole agent, who does not delegate powers to other agents but will assume the agent banking relationship/responsibility by himself while the Sub-Agents are networks of agents that will be under the direct control of a super agent as may be provided in the agent banking contract.
Also, licensed institutions are advised to renew all agent agreements biennially except otherwise required while the CBN will, at least on annual basis, monitor financial institutions/agent relationships; compliance with laid down guidelines and regulations.
The approach for monitoring super-agent would differ from other agent types in view of the probable higher risk, liquidity management and consequences of failure. In the case of super agents the CBN shall require full disclosure on persons or entities that control more than 10 per cent or more of the share capital or has powers to exercise significant influence over the management.
The guideline is in line with the powers conferred on the banking watchdog by Section 2 (d) of the CBN Act, 2007 and Section 57 (2) of the Banks and Other Financial Institutions Act (BOFIA), Laws of the Federation of Nigeria, 2004.
The statute empowers the CBN to issue guidelines for the maintenance of adequate and reasonable financial services to the public.
The objective of agent banking, it said, is to provide minimum standards and requirements for agent banking operations, enhance financial inclusion and provide for agent banking as a delivery channel for offering banking services in a cost effective manner.
Agent banking is the provision of financial services to customers by a third party (agent) on behalf of a licensed deposit taking financial institution and/or mobile money operator (principal).
The agent banks are expected to receive cash deposit and withdrawal, carry out bills payment (utilities, taxes, tenement rates, subscription etc.), payment of salaries, funds transfer services (local money value transfer), balance enquiry, generation and issuance of mini statement, collection and submission of account opening and other related documentation among others.
They are also to carry out cash disbursement and cash repayment of loans, cash payment of retirement benefits, cheque book request and collection, collection of bank mail/correspondence for customers, any other activity as the CBN may from time to time prescribe.
The applications for licence will be accompanied with board approval, document that will outline the strategy of the financial institution, including current and potential engagements, geographical spread and benefits to be derived among other factors.
Under the guideline, Super-Agents are described as agent networks that will establish a collection of outlets or franchise within its wide network of outlets that will be under its supervision and control.
The Sole Agent is expected to be a sole agent, who does not delegate powers to other agents but will assume the agent banking relationship/responsibility by himself while the Sub-Agents are networks of agents that will be under the direct control of a super agent as may be provided in the agent banking contract.
Also, licensed institutions are advised to renew all agent agreements biennially except otherwise required while the CBN will, at least on annual basis, monitor financial institutions/agent relationships; compliance with laid down guidelines and regulations.
The approach for monitoring super-agent would differ from other agent types in view of the probable higher risk, liquidity management and consequences of failure. In the case of super agents the CBN shall require full disclosure on persons or entities that control more than 10 per cent or more of the share capital or has powers to exercise significant influence over the management.
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