The Central Bank of Nigeria (CBN) says it will review the products and solutions being launched by licensed financial institutions.
This was announced in a circular issued to all deposit money banks, mobile money operators and payment service providers on Monday and signed by Musa Jimoh, the director of payments system management department, and Kevin Amugo, director of financial policy and regulation department.
A regulatory sandbox is a formal process for firms to conduct live tests of new products, services, delivery channels, or business models in a controlled environment, with regulatory oversight, subject to appropriate conditions and safeguards.
“The Central Bank of Nigeria is committed to building a financial services sector that promotes stability, fosters innovation and deepen inclusion,” the circular read.
“In this regard, the CBN has implemented several reform initiatives towards the achievement of these objectives. In continuation of these efforts, the CBN hereby issues the framework for the regulatory sandbox operations in Nigeria.
“The framework details the requirements for conduct of live tests on innovative products, services and other solutions in a controlled environment.
“To this end, the CBN shall review the products and solutions of applicants (licensed institutions, fintechs, innovators and researchers) during its implementation.”
A draft of the regulatory framework for sandbox operations that had previously been released said operations will “enable the bank to stay abreast of innovations while promoting a safe, reliable and efficient payments system to foster innovation without compromising on the delivery of its mandate”.
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The framework also said it aims to increase competition, widen consumers’ choice, lower costs and provide an avenue for regulatory engagement with fintech firms in the payment space while contributing to economic growth.