CBN warns banks, PSBs against de-marketing – TheNigerialawyer

The Central Bank of Nigeria has said that competition is
expected to increase in the banking sector with entrance of the
Payment Service Banks.

The Director, Payments System Department, CBN, Mr Ademola
Adeleke, said this while speaking on, ‘The implications of payments
service bank in Nigeria,’ at the Chartered Institute of Bankers’
forum in Lagos on Thursday.

According to him, de-marketing would, however, not be welcomed
by the regulator.

He said, “While we reckon that competition will be stronger, it
is important that we eschew the tendency for de-marketing practices
to avoid weakening the banking industry. We must desist from such
practice and collaborate for the benefit of participants and most
importantly the banking public and the financial system.”

While mentioning that the PSBs were new to the banking industry,
he said there was a need to ensure that they did not heighten risks
in the industry.

“As you are aware, PSBs will evolve from telecommunication
companies, fast moving consumer goods companies, chain store and
postal services, hence there is a need to ensure that we ramp up
capacity in the industry,” he said.

He explained that the PSBs were specialised banks established to
promote financial inclusion and enhance access to financial
services for low-income earners and unbanked segments of the
society by leveraging technology.

The PSBs, he noted, had been set up with the sole objective of
enhancing financial inclusion in rural areas by increasing access
to deposit products and payment/remittance services to small
businesses, low-income households and other entities through
high-volume low-value transactions in a secured technology-driven
environment.

The Director, CIBN Centre for Financial Studies, Prof. Olalekan
Asikhia, said in today’s digital economy, highly innovative payment
capabilities were causing massive changes in consumer behaviour and
creating disruptive opportunities for businesses.

He said, “One of such initiatives with the potentials to usher
in innovative payment solutions are the Payment Service Banks. PSBs
have the potential to revolutionise the banking and financial
services ecosystem and further narrow the financial exclusion gap
of the country.

“They would serve as novel type of institution which would
leverage technology and digital strategies to enhance access to
financial services for low-income earners, unbanked and underserved
customers.”