Memo to the CBN Governor - Re: Banks To Provide Mobile Wallet Services Without Prior Approval.
Memo to the CBN Governor
Re: Banks To Provide Mobile Wallet Services Without Prior Approval.
1) Mr. Governor, my attention has just been drawn to the CBN circular with reference number PSM/DIR/GEB/CIR/01/011 dated July 4, 2019 and titled OPERATION OF MOBILE MONEY WALLETS BY DEPOSIT MONEY BANKS. Vide this, the CBN directs that deposit money banks do not henceforth require prior approval to offer mobile money wallet services.
2) Sir, I seek to remind you that banks, traditionally, provide loans, financing and financial support, credit lines and monetary incentives to their customers, and the public at large. This in turn engenders economic development, employment opportunity and financial empowerment for the people.
3) Sadly, however, banks have mostly abandoned these traditional duties and descended into the business plazas themselves.
4) For example, my bank now provides commercial services like airtime and data vending, power & water payments services, travel agency services, hotel bookings and reservations, cable TV subscriptions, insurance brokerage, visa services, airline and bus ticketing services; and the list keeps growing. I keep wondering what further business activities are then left for their customers.
5) By CBN's 'Regulation on the scope of Banking Activities' of September 7, 2010, your predecessor in office, Mallam Sanusi Lamido (as he then was), directed banks to divest from non-banking businesses. We heaved a sigh of relief, that the people’s source of daily bread would be protected from these high and mighty incursions. This, I believe, was in line with worldwide standards.
6) But today, it is a commercial free-for-all, as banks now strive with their customers in conducting business activities. It's becoming so ridiculous these days as you even see banks foraging into fashion, food and allied services. For example, businesses as common as airtime and data vending are gradually been cornered and overtaken by the banks, leaving the hapless citizens further disempowered financially. At this commandeering pace at which our banks are proceeding, I fear for the businesses of our meshai (tea seller), pepper sellers and bus drivers!
7) Moreso, now that banks have been given free rein to provide mobile wallet services without prior authorization. Same business as being provided by the likes of our own Paga, Interswitch, etranzact, Mkudi, Zoto, etc. These indigenous organizations have only managed to hold their forte against giants like Firstmonie, GTPay, EazyMoney, etc operated by the commercial banks. The resultant consequences of this latitude can be easily foreseen, as the existing providers will eventually be competed out of business.
8) My worry is, when banks 'drag and snatch' business opportunities from their customers, then from whence will the customer's help come! How many businesspersons have the financial muscle to contend with the banks!
9) All over the world, dedicated attention is focused on the growth of the macro- and microeconomic sectors of the economy. It is trite that the development of small, medium and micro economic enterprises is the backbone of any struggling economy like ours. Methinks the overall economic development of the population should be the ultimate focus of any banking policy formulation.
10) Mr. Governor, I recommend that the CBN policy of 2010 be revisited. I recommend that commercial banks be limited to their original role of mainly providing financial support to small and medium-scale enterprises, amongst others; not 'dragging' businesses with them.
Yours in the service,
Babatunde Manuel Akinshola