As part of drive to save traditional banking institutions from imminent crash out of business, the Central Bank of Nigeria (CBN) has placed a ban on PoS operators from using their terminals for transactions.
The ban is contained in a fresh circular issued by the apex bank. The ban is part of a more extensive list of 16 prohibited activities for bank agents, which includes accepting cheques and conducting foreign transactions.
The CBN stated that the new guidelines, which includes several restrictions to mitigate risks in the financial sector, were necessary due to the increasing number of banking agents across the country
The guideline was announced in a circular titled Exposure Draft of the Regulatory Framework for Agent Banking in Nigeria, signed by Musa Jimoh, the Director of the Payments System Management Department.
According to the circular, the agent banking initiative has resulted in the proliferation of financial services agents across Nigeria, resulting in a significant and growing portion of financial transactions being conducted through the agents.
“This has necessitated the review of agent banking regulations to streamline activities in agent banking while ensuring that appropriate risk mitigation measures are taken by stakeholders”, it said.
Section 8.3 of the guidelines which highlighted prohibited activities for agents stated: “An agent shall not accept deposit or allow withdrawal above an amount which shall be prescribed, from time to time by the bank.
“Use the wrong option for transactions e.g agents shall not use the purchase option PoS Terminals for cash in and cash out transactions.”
A closer look at some of the activities banned One of the key restrictions in the guideline is that agents must not use the purchase option on PoS terminals for cash-in and cash-out transactions.
The CBN has also warned agents against transactions where a receipt or acknowledgement cannot be generated. In addition to the above mentioned restrictions, the circular prohibits agents from conducting transactions in foreign currency.
