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CBN Bars Payment Service Banks From Granting Loans


Nigeria’s apex bank has barred Payment Service Banks (PSBs) in Nigeria from granting loans. It also barred the PSBs from accepting foreign currency in its latest guidelines seen by InfomediaNG. This means that the PBS can no longer grant any form of loans, advances, and guarantees, directly or indirectly, to their customers.

For all categories of loans, you can apply for and the process involved, you can find more details at

What does this mean?

1) PSBs have been exempted from accepting foreign currency deposits,


2) They can’t deal in the foreign exchange market,

3) They are also barred from accepting closed scheme electronic value (e.g. airtime) as a form deposit or payment

4) They can’t establish any subsidiary except as prescribed by the CBN

5) They can’t undertake other transactions which are not prescribed by the new CBN rules.


The only exception in the new update is that CBN allows the PSBs to grant loans to their employees in line with their established loan policy and subject to the Board’s approval.

They can accept deposits from individuals and small businesses, which shall be covered by the deposit insurance scheme

They can also carry out payments and remittances, including inbound cross-border personal remittances, services through various channels within Nigeria.

Part of the new regulation reads:

“This framework hereby provides a set of regulations that are targeted at streamlining operations of PSBs, ensuring transparency in their operations as well as ensuring adequate customer protection.

“The framework focuses on corporate governance, risks management of the PSBs and safety of funds to the consumers of the PSBs’ products.

According to the Godwin Emefiele-led CBN, the framework aims to ensure sound risk management practices are embedded in the operations of the PSBs.

Also Read:  MarketMoni Loan Application Process & Requirements

It stated that they should use strictly use the words, ‘Payment Service Bank’ in their names to differentiate them from other banks. “The name of a PSB shall not include any word that links it to its parent company or promoter,’’ CBN said.

It also stated that PSBs shall operate mostly in the rural areas and unbanked locations “targeting financially excluded persons with not less than 25 percent financial service touchpoints in such areas as defined from time to time.”

Some of the methods of operations specified for the PSBs by the CBN are the deployment of  ATMs in some of the local locations, deployment of Point of Sale devices, electronic platforms, and rollout agent networks with the prior approval of the CBN among others.



  • Opeyemi Quadri

    Ope is a finance writer and researcher with 10+ years of experience in content creation. His interests cut across decentralized finance, investment, foreign exchange, government policies and politics.

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