Regulatory Alerts2013-02-08 | BPS/PSP/GEN/CWD/03/038Guidelines for the Regulation of Agent Banking and Agent Banking Relationships in Nigeria
These are guidelines for agent banking operations in Nigeria, published by the Central Bank of Nigeria (CBN). The following main points can be summarized from these comprehensive guidelines: 1. Agent Banking is defined as a business model where a third-party agent acts on behalf of a licensed financial institution to provide selected financial services to customers within agreed service areas. 2. FIs are required to obtain approval and maintain compliance with the guidelines at all times. 3. Agents must be registered by the FI, which is responsible for their recruitment, training, and supervision. 4. There are several types of agents, including cash deposit & withdrawal, funds transfer, bill payments, airtime purchases, savings deposits, loan repayments, and more. 5. Agents should not hold themselves out as FIs nor accept deposits or borrow from the public. 6. FIs must put in place risk management systems to monitor their agent networks and ensure they comply with AML/CFT guidelines. 7. Customers' funds and transactions must be adequately protected, including secure systems for customer information confidentiality. 8. Complaints procedures should be established by FIs to resolve any issues arising from agent banking services promptly. 9. Branding and advertising rules apply to both the financial institution and its agents. 10. CBN has various powers over agents, including inspection of premises and directives on conduct or termination of agency contracts. 11. Violations may result in sanctions such as prohibition from engaging in agent banking business, loss of approval, termination of the agent banking contract, withholding corporate approvals, or financial penalties.