CBN Lists Conditions for Agent Banking

In preparation for the take-off of agency banking in the country, financial institutions that wish to render such services have been advised to write to the Central Bank of Nigeria (CBN) requesting for a one-off approval to offer agency banking services. The central bank stated this in a circular titled: “Clarification on the Requirements for Agent Banking in Nigeria,” signed by the Director, Banking and Payment System Department, CBN, Mr. Dipo Fatokun, a copy of which was posted on its website Monday. The CBN had released the guidelines for agent banking in February 2013, to guide the industry on the requirements and conditions for agent banking in Nigeria. In addition to the previsions, as part of the approval process for financial institutions wishing to deploy agent banking services, the letter which was addressed to Deposit Money Banks (DMBs), microfinance banks (MFBs) and Primary Mortgage Banks (PMBs) also said the application should be submitted to the respective departments of the CBN.
It stated that the central bank would only review and process applications from DMBs, MFBs and PMBs. But it pointed out that agents are not required to apply directly to CBN for approval but would be appointed and monitored by their principals (i.e. DMBs, MFBs and PMBs), based on the requirements for agents recruitment as contained in the guideline. “The principal shall be held responsible for the activities of the agents that they have appointed to offer services on their behalf. The eligibility criteria for agents, as contained in Section 4.1.i to 4.1.vi of the guidelines for the requirement of agent banking', apply to super-agents and sole-agents only. “Super-agents are to determine the eligibility criteria for their Sub-Agents, in line with best practice. Licensed mobile money operators need not seek any approval from the CBN to appoint agents. The regulatory framework under which they are licensed already permits them to appoint agents, in line with the existing provisions. They only need to include the details of such appointed agents in their regular reports to the CBN,” it stated. Parts of the guidelines stipulate that notwithstanding the responsibility of the financial institutions to monitor and supervise their agents, the CBN may at any time request for any information or carry out inspections, as it deems necessary.