CBN unveils framework to strengthen agent banking

As part of efforts to encourage agent banking in the country, the Central Bank of Nigeria (CBN) has unveiled a framework for licensing super-agents.

A super-agent is an agent that has been contracted by the principal and may thereafter subcontract other agents in a network while retaining overall responsibility for the agency relationship.

On the other hand, agent banking is the provision of financial services to customers by a third party (agent) on behalf of a licensed deposit taking financial institution or mobile money operator.

In a document posted on its website on Tuesday titled ‘Exposure Draft on the Licensing Framework for Super-agents, CBN noted that the approach for monitoring super-agent would differ from other agent types in view of the probable higher risk, liquidity management and consequences of failure.

According to the framework, “any institution that wishes to be licensed as a super-agent shall submit an application for approval to the CBN”.

The document stated that a super-agent shall be licensed by the CBN and must be a company with an existing business, operational for at least 12 months.

The company must be registered with the Corporate Affairs Commission (CAC) with a minimum Shareholders’ Fund unimpaired by losses of N50million and have a minimum of 50 agents.

Licensed companies shall renew all agent agreements biennially (every two years), except otherwise required.

The Super-agents’ platform shall be for the management and monitoring of the activities of their agents only and shall not hold electronic money value, whereas, the financial institution (FI) shall provide and operate the Mobile Money platform and hold electronic money value.

A super-agent’s platform shall be enabled to communicate with all its agents and have visibility of their mobile money transactions on the FI’s platform.

A common logo shall be adopted by all agents and the agent number, assigned by the CBN during licensing, shall be conspicuously
displayed at its outlet.

To verify the authenticity of the agent, customers shall be provided a channel (web, SMS, USSD short-code, etc.).

CBN said it would have power to Request for information from agents at any time, carry out spot or scheduled inspection of the books and premises of the agent; direct an agent to take such actions or desist from such conduct as the CBN may find necessary and direct the termination of the agency contract as the CBN may find necessary.