Experts Caution CBN, Banks As Agent Banking Kicks Off | Independent Newspapers Limited
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Experts Caution CBN, Banks As Agent Banking Kicks Off

cbn; interbank, external resesrves
Posted: Apr 8, 2016 at 3:00 am   /   by   /   comments (0)

Bamidele Ogunwusi



Financial experts have cautioned the Central Bank of Nigeria (CBN) and deposit money banks (DMBs) to employ strict supervision in the agent banking project if it must succeed.

The experts were reacting to the decision of the Bankers’ Committee on Thursday that the stage is now set for the kick off of agent banking project across the country with the appointment of two super agents, Interswitch and Innovative Services.

A bank “agent” means an entity that has been contracted by an institution and approved by the CBN to provide the services of the institution on behalf of the institution, institution usually bank.

Agency banking is the provision of banking services by a third party agent to customers on behalf of a licensed, prudentially-regulated financial institution, such as a bank or any other deposit taking commercial bank.

A bank agent is usually equipped with a certified point of sales (PoS) terminal with which he can process withdrawals and deposits after the consumer swipes his certified bank debit or credit card.

These PoS devices connect to the core banking system via a GPRS data connection using any of the major mobile network operators’ networks.

The bank agency model has been a hub and spoke model, with agents being associated with a nearby bank branch from which their liquidity is managed by the bank, hence in a sense, still rides the existing brick and mortar networks of the bank.

Mrs. Tokunbo Martins, Director of Banking Supervision of the CBN, disclosed at the end of the 346th Bankers’ Committee meeting in Lagos on Thursday that the CBN has recruited agents to drive the project across the country and the super agents are to also appoint agents that will provide banking services to the people at affordable prices.

Her words: “We believe that access to financial services should be given to everybody across the country and that one thing that will drive this is the agent banking. The CBN has approved these companies to drive the project and we are optimistic that they will do a good job by bringing services that had hitherto not at the reach of the people in our communities to them”.

Anor Anyanwu, the former Deputy Managing Director of Mainstreet Bank, said the decision of the CBN and the Bankers’ Committee is long overdue and that caution should be exercised in the appointments of the local agents as these people will be the ones to drive the project.

“As good as the decision is there is the need for us to look very deep into the area of those to drive the project. The calibre of agents to do this work should be people that are of proven character and of high integrity.”

He added that agent banking will go a long way at bringing banking close to the people in the rural communities across the country and expand the scope of financial inclusion.

“This is when we are beginning to do real banking. This is when banking services will reach the nooks and crannies of the country. Financial inclusion will be given a better meaning when everybody in the country can have access to banking services.

“This is a great decision by the Bankers’ Committee and the CBN. I am very optimistic that these super agents because of their pedigree will do the job thoroughly and appoint agents that will carry out their duties diligently”, he stressed.

Justus Adiri, a retired bank executive and a charted accountant, said the decision is a welcome development but added that for Nigeria to achieve the kind of success recorded in Kenya all hands must be on deck.

“I have said it several times that agent banking is a veritable avenue of bringing banking services to the unbanked Nigerians in the rural areas at reduced prices. The Kenyan example has been a fantastic demonstration of how the people can be brought into main stream banking without stress and I am of the opinion that we need a legislation to drive it not a mere declaration by the CBN of the Bankers’ Committee”, he said.