The Central Bank of Nigeria has said that competition is expected to increase in the banking sector with entrance of the payment service banks.
Ademola Adeleke, the director, payments system department, CBN, said this while speaking on, ‘The implications of payments service bank in Nigeria,’ at the Chartered Institute of Bankers’ forum in Lagos on Thursday.
According to him, de-marketing would, however, not be welcomed by the regulator.
He said, “While we reckon that competition will be stronger, it is important that we eschew the tendency for de-marketing practices to avoid weakening the banking industry. We must desist from such practice and collaborate for the benefit of participants and most importantly the banking public and the financial system.”
While mentioning that the PSBs were new to the banking industry, he said there was a need to ensure that they did not heighten risks in the industry.
“As you are aware, PSBs will evolve from telecommunication companies, fast moving consumer goods companies, chain store and postal services, hence there is a need to ensure that we ramp up capacity in the industry,” he said.
He explained that the PSBs were specialised banks established to promote financial inclusion and enhance access to financial services for low-income earners and unbanked segments of the society by leveraging technology.
The PSBs, he noted, had been set up with the sole objective of enhancing financial inclusion in rural areas by increasing access to deposit products and payment/remittance services to small businesses, low-income households and other entities through high-volume low-value transactions in a secured technology-driven environment.
Olalekan Ashikia, a professor and the director, CIBN Centre for Financial Studies, said in today’s digital economy, highly innovative payment capabilities were causing massive changes in consumer behaviour and creating disruptive opportunities for businesses.
He said, “One of such initiatives with the potentials to usher in innovative payment solutions are the Payment Service Banks. PSBs have the potential to revolutionise the banking and financial services ecosystem and further narrow the financial exclusion gap of the country.
“They would serve as novel type of institution which would leverage technology and digital strategies to enhance access to financial services for low-income earners, unbanked and underserved customers.”
The souls of our ancestors will now rest in peace!