Regulatory Alerts2012-12-10 | BPS/DIR/GEN/CIR/01/012CBN Exposure Draft Guidelines for the Establishment of Agent Banking 2012
The Central Bank of Nigeria has provided a detailed guideline on the regulation and operation of Agent Banking in Nigeria to ensure safe, efficient and effective implementation. Below are key points extracted from the extensive guidelines: 1. Agent banking refers to the use of an agent as a channel for providing financial services directly to the customers. 2. The Central Bank of Nigeria (CBN) has the authority to regulate and supervise all forms of non-banking commercial activities, including agent banking operations. 3. FIs are required to establish clear policies, procedures, and guidelines for their agents. 4. Agents must maintain strict confidentiality of customer information and take all necessary measures to secure the transaction process. 5. Only licensed financial institutions (FIs) can engage in agent banking. 6. An agent bank should have a physical office or premises where it operates from and should display its logo, the name of the FI they represent, as well as their license for the commercial activity. 7. An agent's services must be provided at the discretion of the institution and are subject to availability of funds in the agent's account with the institution. 8. All transactions made through an agent are considered as originating from or being made on behalf of the institution. 9. The role of the agent is restricted to receiving and delivering documents, providing information, offering basic financial services such as cash withdrawal, deposit, bill payments, and balance inquiries. Agents cannot represent themselves as financial institutions. 10. An agreement between the FI must be signed by both parties (the Financial Institution and the Agent) and should contain provisions such as dispute resolution, indemnity clauses, agent's remedial measures, confidentiality agreement, etc. 12"