CBN Sets N1m As Application Fee For Payment Service Holding Company Licence

The Central Bank of Nigeria (CBN) released guidelines for the
establishment and regulation of payments service holding companies
(PSHCs) in Nigeria.

Musa Jimoh, CBN’s director of payments system management
department, announced this in a circular on Tuesday.

The guideline requires companies that intend to offer both
switching and processing, and mobile money services to set up a
PSHC structure.

“This arrangement would prevent commingling of activities,
facilitate management of risks and enable the Central Bank of
Nigeria exercise adequate regulatory oversight on all the companies
operating within the Group (PSHC),” the circular reads.

CBN said promoters of a PSHC shall be required to submit a
formal application for the grant of a licence.

However, it said the application process will be in two phases:
approval-in-principle (AIP) and a final licence.

According to the guideline, the capital requirement to apply for
an AIP is “a non-refundable application fee of N1,000,000.00 (One
Million Naira only) or such other amount that the CBN may specify
from time to time; payable to the Central Bank of Nigeria, through
electronic transfer.

“Not later than six (6) months after obtaining the AIP, the
promoters of a proposed PSHC shall submit an application to the CBN
for the grant of a final licence.

“The application shall be accompanied with non-refundable
licensing fee of N5,000,000.00 (Five Million Naira only), or such
other amount that the CBN may specify from time to time, payable to
the Central Bank of Nigeria by electronic transfer”.

The apex bank explained that a PSHC will be set up for the
purposes of making and managing equity investment in two or more
companies being its subsidiaries, which are payments service
providers across three categories: mobile money operations,
switching and processing, and payment solution services.

“PSHC shall be non-operating, existing solely to carry out
investment in approved subsidiaries without engaging in the
day-to-day management and operations of subsidiaries.

“It shall have a board size of between 5 and 10 or as determined
by applicable CBN Corporate Governance Guidelines.”

CBN added that no PSHC is allowed to borrow from the Nigerian
banking system for the purpose of capitalising itself or any of its
subsidiaries.

The Central Bank of Nigeria (CBN) released guidelines for the
establishment and regulation of payments service holding companies
(PSHCs) in Nigeria.

Musa Jimoh, CBN’s director of payments system management
department, announced this in a circular on Tuesday.

The guideline requires companies that intend to offer both
switching and processing, and mobile money services to set up a
PSHC structure.

“This arrangement would prevent commingling of activities,
facilitate management of risks and enable the Central Bank of
Nigeria exercise adequate regulatory oversight on all the companies
operating within the Group (PSHC),” the circular reads.

CBN said promoters of a PSHC shall be required to submit a
formal application for the grant of a licence.

However, it said the application process will be in two phases:
approval-in-principle (AIP) and a final licence.

According to the guideline, the capital requirement to apply for
an AIP is “a non-refundable application fee of N1,000,000.00 (One
Million Naira only) or such other amount that the CBN may specify
from time to time; payable to the Central Bank of Nigeria, through
electronic transfer.

“Not later than six (6) months after obtaining the AIP, the
promoters of a proposed PSHC shall submit an application to the CBN
for the grant of a final licence.

“The application shall be accompanied with non-refundable
licensing fee of N5,000,000.00 (Five Million Naira only), or such
other amount that the CBN may specify from time to time, payable to
the Central Bank of Nigeria by electronic transfer”.

The apex bank explained that a PSHC will be set up for the
purposes of making and managing equity investment in two or more
companies being its subsidiaries, which are payments service
providers across three categories: mobile money operations,
switching and processing, and payment solution services.

“PSHC shall be non-operating, existing solely to carry out
investment in approved subsidiaries without engaging in the
day-to-day management and operations of subsidiaries.

“It shall have a board size of between 5 and 10 or as determined
by applicable CBN Corporate Governance Guidelines.”

CBN added that no PSHC is allowed to borrow from the Nigerian
banking system for the purpose of capitalising itself or any of its
subsidiaries.