CBN Imposes Restrictions on Agents: PoS Terminals for Transactions Prohibited in Cashless Economy

The Central Bank of Nigeria (CBN) has issued a circular outlining new restrictions on the use of Point of Sale (PoS) terminals by agents for cash-in and cash-out transactions. The circular also includes a warning against carrying out transactions without generating a receipt or acknowledgment and a ban on transactions in foreign currency.

The CBN announced the new regulations in an Exposure Draft of the Regulatory Framework for Agent Banking in Nigeria. The central bank has adopted agent banking as a financial inclusion service to extend its retail reach across all segments. Services offered under this initiative include First Monie, EcoBank express, UBA Moni, and Zenith mobile money, among others.

The expansion of financial services agents across Nigeria has resulted in a significant and growing portion of financial transactions being conducted through them. As such, the CBN has reviewed agent banking regulations to streamline activities in agent banking while ensuring appropriate risk mitigation measures are taken by stakeholders.

The new regulations prohibit agents from accepting deposits or allowing withdrawals above a prescribed amount, using the purchase option PoS terminals for cash-in and cash-out transactions, undertaking cheque deposit and encashment of cheques, opening accounts, granting loans, or carrying out any appraisal function for purposes of opening an account or granting a loan or any other facility unless permitted by written law.

Additionally, the circular prohibits agent bank employees from being staff of a financial institution and from providing cash advances. The guidelines aim to ensure that appropriate risk mitigation measures are taken by stakeholders and that agent banking activities are streamlined.

Conclusion

In conclusion, the CBN's circular outlining new restrictions on the use of PoS terminals by agents for cash-in and cash-out transactions is aimed at ensuring that appropriate risk mitigation measures are taken by stakeholders and that agent banking activities are streamlined. The guidelines prohibit agents from carrying out certain activities and ban transactions in foreign currency. It is crucial for stakeholders to comply with these regulations to ensure the continued growth and success of agent banking in Nigeria.