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How to Get a Digital Banking License in Nigeria

How to Get a Digital Banking License in Nigeria — Using technology to its full potential has become the biggest trend called “digital banking” in banking today, with many banks offering full-featured mobile apps that allow customers to check their balance, pay bills, and even open new accounts from the palm of their hand – all without having to step into an actual bank branch. But how do you get your bank’s digital products off the ground? That’s where the digital banking operating license comes in.

To know How to Get a Digital Banking License in Nigeria, in this article, we will walk you through the steps of acquiring your digital banking license, from getting approval from your local regulators to meeting compliance requirements and submitting your application. Ultimately, you’ll learn how to get an e-banking license in Nigeria, along with information on how the application process works and the documents you will need to submit.

Obtaining a Digital Banking/Payment Services Bank License from CBN

The process for getting a Digital banking license in Nigeria starts with registration with the Central Bank of Nigeria (CBN). Before you can get a digital banking license. You can’t just call them up and register, you need to get the CBN application forms, fill out their documents, provide all necessary information, and submit the application form to CBN if your company meets all CBN requirements then a digital banking license will be issued to you.

CBN Licensing Requirements For Digital Banking In Nigeria

Eligible Promoters of Digital Bank

The following may promote PSBs:
i. Banking Agents;
ii. Telecommunications companies (Telcos), through subsidiaries;

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iii. Retail chains (supermarkets, downstream petroleum marketing
iv. Postal services providers and courier companies;
v. Mobile Money Operators (MMOs that desire to convert to Payment
Service Banks shall comply with the requirement of this Guideline);
vi. Switching Companies;
vii. Financial technology companies (Fintech);
viii. Financial Holding Companies; and
ix. Any other entity on the merit of its application is subject to the approval of
the CBN.
Where the promoter of a PSB is a regulated entity, it shall be required to obtain
approval or a ‘no objection letter’ from its primary regulator and submit the same
at the licensing application stage to the CBN.


The promoters of a PSB shall be required to submit a formal application for the
grant of a Payment Service Bank license addressed to the Governor of the CBN.
The promoters of a PSB shall make a formal presentation of the proposal to the
Director, Financial Policy and Regulation Department (FPRD), CBN. The proposal should cover the following amongst others:
i. business case;
ii. vision and strategy;
iii. governance arrangements;
iv. risk management;
v. compliance; and
vi. financial viability.

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6.1 Requirements for grant of Approval-In-Principle (AIP)
A) The application shall be accompanied by the following:
i. A non-refundable application fee of N500,000 (five hundred thousand
Naira only) in bank draft, payable to the Central Bank of Nigeria or such other amount as the CBN may specify from time to time;
ii. Evidence of minimum capital deposit in line with Section 6.6 of this
Regulation, to be verified by the CBN;
iii. Evidence of capital contribution made by each shareholder;
iv. Evidence of name reservation with the Corporate Affairs Commission (CAC);
v. Detailed business plan or feasibility report which shall, at a minimum, include:
a) Objectives of the PSB;
b) Justification for the application;
c) Proposed ownership structure in a tabular form, indicating the names of potential investors, profession/business, and percentage shareholdings;
d) Detailed bio-data/resume of proposed shareholders;
e) Source(s) of funding of the proposed equity contribution for each investor. Where the source of funding the equity contribution is a loan, such shall be a long-term facility of at least 7-year tenor and shall not be taken from the Nigerian
banking system;
f) Board and board committee charters stating the roles and
responsibilities of the board and sub-committees;

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g) Criteria for selecting board members;
h) Board composition and detailed resumes of proposed
directors. The total number of directors shall be between 5 and
7, including at least two independent directors;
i) Completed Fitness and Propriety Questionnaire, and sworn declaration of net worth executed by the proposed directors and significant shareholders;
j) Bank Verification Number (BVN) and Tax Clearance Certificate of each proposed director and significant shareholders;
k) Organizational structure, showing functional units,
responsibilities, reporting relationships, and grade of heads of departments/units;
l) List of proposed top management staff (AGM and above) and their detailed resumes, stating qualification (including photocopies of academic and professional credentials), experience, and records of accomplishments, etc;
m) Schedule of services to be rendered;
n) Sales, distribution, and marketing strategy showing geographic coverage;
o) Five-year financial projection of the proposed bank indicating
expected growth, profitability, and the underlying assumptions; and
p) Details of information technology requirements and facilities.
vi. For corporate investors, promoters shall forward the following additional documents:
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a) Certificate of Incorporation and certified true copies of other incorporation documents;
b) Board resolution supporting the company’s decision to invest in the equity shares of the proposed bank;
c) Names and addresses (business and residential) of owners, directors, and their related companies, if any; and
d) Audited financial statements & reports of the company and Tax Clearance Certificate for the immediate past 3 years.
vii. Draft copy of the company’s Memorandum and Articles of
Association (MEMART). At a minimum, the MEMART shall contain the
following information:
a) Proposed name of the bank
b) Object clause
c) Subscribers to the MEMART
d) Procedure for amendment
e) Procedure for share transfer/disposal
f) Appointment of directors
viii. A written and duly executed undertaking by the promoters that the bank will be adequately capitalized for the volume and character of its business at all times, and that the CBN shall have powers to supervise and regulate its operations;
ix. For regulated foreign institutional investors, an approval or a ‘no objection letter from the regulatory authority in the country of

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x. Shareholders’ agreement providing for disposal/transfer of shares as well as authorization, amendments, waivers, and reimbursement of expenses;
xi. Statement of intent to invest in the bank by each investor;
xii. Technical Services Agreement;
xiii. Detailed Manuals and Policies, particularly:
a) Manual of Operations;
b) Asset/Liability Management Policy (ALM Policy) that highlights the bank’s permissible assets and liabilities, sets the standards for managing its interest rate, duration risk, and liquidity risk, and delineates the composition, duties, and operational procedures for the bank’s Asset/Liability Management Committee;
c) Financial Management Policy that highlights the bank’s financial management policies and procedures, and system of internal controls. The Policy should include, at a minimum:
i. Accounting policies and principles;
ii. Roles and responsibilities of the senior management officials responsible for financial management;
iii. Treasury operations, including funds management, vouchers, payroll, and procurement;
iv. Financial record keeping and reporting; and
v. Auditing and periodic testing of internal controls.
d) Anti-Money Laundering and Combating Financing of Terrorism
(AML/CFT) Policy;
e) Enterprise-Wide Risk Management Framework;

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f) Code of Ethics and Business Conduct that specifies high standards for honesty, integrity, and impartiality for the bank’s employees, officers, and directors and provides guidance on avoiding conflicts of interest, self-dealing, and other types of impropriety as specified in the BOFIA or by the Bank. Every
director and officer of the bank shall be required to sign the Code of Ethics and Business Conduct;
xiii) Any other information that the CBN may require from time to time.
B) Following the receipt of an application with complete and satisfactory documentation, the CBN shall communicate its decision to the applicant within 90 days. Where the CBN is satisfied with the application, it shall issue an Approval-in-Principle (AIP) to the applicant.
C) The proposed bank shall not incorporate/register its name with the CAC until an AIP has been obtained from the CBN in writing, a copy of which shall be presented to the CAC for registration.
6.2 Requirements for Granting of Final License
Not later than six (6) months after obtaining the A.I.P, the promoters of a proposed PSB shall submit an application for the grant of a final license to the
CBN. The application shall be accompanied by the following:
i. Non-refundable licensing fee of N2,000,000.00 (Two Million Naira Only) in bank draft payable to the Central Bank of Nigeria;
ii. Certified True Copy (CTC) of Certificate of Incorporation of the bank;
iii. CTC of MEMART;
iv. CTC of Form CAC 1.1;
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v. Evidence of the location of the Head Office (rented or owned) for the takeoff of the business;
vi. Schedule of changes, if any, in the Board and Shareholding after the
grant of AIP;
vii. Evidence of ability to meet technical requirements and modern infrastructural facilities such as office equipment, computers, and telecommunications, to perform the bank’s operations and meet CBN and other regulatory requirements;
viii. Copies of letters of offer and acceptance of employment in respect of the management team;
ix. Detailed resumes of top management staff ;
x. Completed Fitness and Propriety Questionnaire, and sworn declaration of net worth executed by top management staff;
xi. Bank Verification Number (BVN) and Tax Clearance Certificate of each top management staff;
xii. Comprehensive plan on the commencement of the bank’s operations with milestones and timelines for the roll-out of key payment channels; and
xiii. Board and staff training program.
6.3 Conduct of Pre-Licencing Inspection
As a requirement to the grant of a final license, the CBN shall conduct an inspection of the premises and facilities of the proposed bank to, amongst others:
a. Check the physical structure of the office building and infrastructure provided for the take-off of the PSB;
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b. Sight the original copies of the documents submitted in support of the application for license;
c. Meet with the Board and Management team whose resumes had earlier been submitted to the CBN;
d. Verify the capital contributions of the promoters; and
e. Verify the integration of its infrastructure with the National Payments System.
6.4 Requirements for commencement of operations
The bank shall, through a letter, inform the CBN of its readiness to commence operations and such information shall be accompanied by one copy of each of the following:
i. Shareholders’ Register;
ii. Share certificate issued to each investor;
iii. Opening statement of affairs signed by at least two directors and auditors;
iv. Enterprise Risk Management Framework (ERMF);
v. Internal control policy;
vi. Minutes of pre-commencement board meeting; and
vii. Evidence of integration of the bank’s infrastructure with the National Payments System.
6.5 Post-commencement Requirements
A PSB shall:
i. Comply with all guidelines and regulations issued by the CBN and other sector regulators.

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ii. Maintain an adequate accounting system and keep records that capture information that reflect the financial condition of the bank.
iii. Maintain an unimpaired minimum capital at all times.
iv. Always comply with the requirements incidental to the authorization to perform banking operations as stipulated by the CBN.

Financial Requirements for Obtaining a Digital Banking License  

The minimum capital requirement, application, and licensing fees for PSBs are as follows:
Minimum capital ₦5,000,000,000.00
Non-refundable application fee ₦500,000.00
Non-Refundable Licensing Fee ₦2,000,000.00
Change of name fee ₦1,000,000.00
The CBN may vary these requirements from time to time.
Promoters should note that in compliance with the BOFIA, the investment of the Share Capital Deposit shall be subject to the availability of investment instruments. Upon the grant of license or otherwise, the CBN shall refund the sum deposited to the applicant, together with the investment income, if any, after deducting administrative expenses and tax on the income.

Get more details in the full document containing CBN requirements for a Digital Banking license in Nigeria