Toba Owojaiye reporting
Abuja, Nigeria
In a recent directive (NIBSS/BD/NI/PO/005/051223) dated December 5, 2023, addressed to various financial entities, the Nigerian Inter-Bank Settlement System (NIBSS) has mandated Deposit Money Banks, Merchant Banks, Switches, Mobile Money Operators, Payment Service Banks, Microfinance Banks, Mortgage Banks, Payment Solution Service Providers (PSSPs), Super Agents, and others to disconnect Switches, PSSPs, and Super Agents from the NIBSS Instant Payment (NIP) Outwards System.
Truth Live News gathered that the communication, signed by Ngover Inyembe-wankwo, the Executive Director of Business Development, emphasizes the violation of Central Bank guidelines on electronic payments for non-deposit taking financial institutions. According to the circular, these entities, namely Switching Companies, PSSPs, and Super Agents, are not permitted to be listed as beneficiary institutions on NIP funds transfer channels. Their licenses, it states, do not authorize them to hold customers’ funds, only allowing them to process outward transfers as inflows to banks.
To reinforce this directive, reference is made to a regulatory advice outlined in the circular titled “Permissible Services and Products of PSSP Operation in Nigeria” with the identifier Ref: BPD/DIR/GEN/CIR/05/004, dated May 11, 2018. The directive, in essence, calls for the removal of Switches, PSSPs, and Super Agents from NIP Outward Transfer channels exclusively, not affecting inward transfers.
This move by NIBSS seeks compliance with established guidelines and regulations, emphasizing the need for financial institutions to align their operations with the stipulated frameworks. The directive, concise and clear, urges prompt action from the addressed entities, anticipating their cooperation in ensuring adherence to the regulatory requirements.
As the financial landscape evolves, such directives play a crucial role in maintaining the integrity of electronic payment systems, safeguarding the interests of both financial institutions and their customers. The NIBSS directive reflects the ongoing efforts to streamline operations, enhance regulatory compliance, and foster a secure financial environment in Nigeria.