CBN has released a new Draft Framework for Regulatory Sandbox Operations focused on emerging technologies in the payments space.
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Public Sector Banks (PSB) Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele
The Payments System Management Department of the Central Bank of Nigeria (CBN) has released a draft framework for regulatory sandbox operations in the country.
The Regulatory Sandbox is a formal process for firms to conduct live tests of new, innovative products, technology, services, delivery channels or business models in a regulated environment subject to appropriate conditions and safeguards.
The framework states the establishment, rules and operations of a regulatory sandbox for the Nigerian payments system.
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This is to promote effective competition, embrace new technology, encourage financial inclusion and improve customer experience, aimed at boosting public confidence in the financial system.
According to the central bank, the objectives of the regulatory sandbox operation in Nigeria are as follows:
- To increase the potential for innovative business models that advance financial inclusion.
- To reduce time-to-market for innovative products, services, and business models.
- To increase competition, widen consumers’ choice and lower costs and to ensure appropriate consumer protection safeguards in innovative products.
Other objectives stated by the reserve bank includes;
- To clearly define the roles and responsibilities of stakeholders and the operations of the sandbox for the Nigerian payments system industry.
- To ensure adequate provisions in regulations to create an enabling environment for innovation without compromising on safety for consumers and the overall payments system.
- To provide an avenue for regulatory engagement with FinTech firms in the payment space, while contributing to economic growth.
Who Can Apply?
Already lincensed CBN financial institutions with FinTech initiatives can apply to use the sandbox regulatory framework in other to test innovative payments product or services.
Other local companies, including financial sector companies, technology and telecom companies looking to test innovative payments product or service can apply to use the sandbox regulatory framework.
Others eligible for the application process include firms proposing non-regulated technology whose proposed solution involves technologies, currently not covered under existing CBN regulations.
Firms looking to enter into the CBN’s Regulatory Sandbox must apply to the CBN through the Regulatory Sandbox online application platform accessed via the CBN’s official website [ITD/WebTeam to develop portal upon approval].
The application must be submitted with a cover letter signed by an authorised signatory of the entity and addressed to the Director, Payments System Management Department, Central Bank of Nigeria, Abuja.
Upon successful application and acceptance by the CBN, a Letter of Approval (LoA) would be issued to the innovator allowing those looking to use the sandbox to test their innovations upon entry into the sandbox.
Kindly forward your application to the Director, Payments System Management Department or through firstname.lastname@example.org on or before July 15, 2020.