Tony Chukwunyem 
The Central Bank of Nigeria (CBN) yesterday released an exposure draft on the regulatory framework for agent banking in the country. According to the apex bank, the guidelines, which cover the operations of agent banking and the licensing of super agents, provide minimum standards and requirements for the operation of agent banking in the country, as well as the roles and responsibilities for stakeholders involved in agent banking. Under the guidelines, any Financial Institution (FI) which wishes to engage in agent banking will apply to the CBN for approval and the application must be accompanied with documents such as, board approval for the business, qualifying criteria for engaging agents showing outreach, competence, integrity, etc., risk management processes instituted for the agent banking activities and feasibility study for the development of the agent business for a minimum period for five years. The guidelines also stipulate that the responsibility for the selection of agents will lie solely with the FI, subject to the following agent structures: Super-agents, sole-agent and sub-agents. On super agents, the guidelines defined them as agent networks licensed by CBN that will establish a collection of outlets or franchise within their wide network of outlets and which will be under their supervision and control. Specifically, the regulatory framework states that an applicant for a super-agent licence, must, among other requirements, have a minimum shareholders’ Fund, unimpaired by losses of N50 million and have a minimum of 50 agents. It further stipulates that for super agents, the CBN will require full disclosure on persons or entities that control 10 per cent or more of the share capital or has powers to exercise significant influence over the management. The document also list activities that are allowed to be performed by agents under agent banking arrangements, to include: Cash deposit and withdrawal within permissible limit; bills payment (utilities, taxes, tenement rates, subscription etc.); funds transfer services (local money value transfer); balance enquiry; generation and issuance of mini statement as well as collection and submission of account opening and other related documentation. Other permissible activities included: Agent mobile payments/banking services; cash disbursement and cash repayment of loans; cash payment and collection of bank mail/ correspondence for customers.
On prohibited activities, the guidelines stated listed these to include: agents operating or carrying out any transaction when there is communication failure with the FI; carrying out a transaction where a receipt or acknowledgement cannot be generated; charging customers fees outside regulated fees regime and giving guarantees. In addition, an agent under agent banking arrangements, is barred from offering banking services on its own accord; continuing with the agency business when it has a proven criminal record involving fraud, dishonesty, or any other financial impropriety; holding itself out to be providing or rendering any banking service which is not specifically permitted in the contract; transacting in foreign currency, providing cash advances and opening accounts, granting loans or carrying out any appraisal function for purposes of opening an account or granting of a loan or any other facility except as may be permitted by any other written law to which the agent is subject.
