E-Financial
How PSBs Can Become Nigeria Challenger Banks – Experts
The possibilities of the planned Payment Service Banks (PSBs) revolutionizing the financial services in Nigeria as they usher in a new era of change in delivering innovative payment solutions to customers is huge, experts in the financial services industry have affirmed.
Fintech experts who spoke at the just concluded Lagos Fintech Week (LFW) were also of the opinion that these new entities could become ‘challenger banks’ as they take on traditional banks in Nigeria.
The term challenger bank is used to describe any bank that is looking to challenge the big four in Britain: Barclays, Lloyds Banking Group (which includes Halifax, Lloyds Bank and Bank of Scotland), HSBC and RBS (which includes NatWest and Ulster Bank).
According to Olusegun Zaccheaus, Senior Manager, Management Consulting, KPMG Advisory Services, the key questions to be answered are: how will the emergence of PSBs impact financial inclusion in Nigeria? What is its market potential and how will this disrupt banking in Nigeria? What kind of bank will the PSB be? How can PSB leverage Fintech partnership in order to achieve their objectives and what are the levers for success in this business?
Zaccheaus argued that PSB, if successful, has the potential to disrupt the banking market from several fronts. These include stealing of the “potential sweet spots in the 36.6 million unbanked and under-banked space, through payments and transactions, cannibalising the 39.7 million banked customer non-interest income revenue potential and increasing bargaining power over deposits”.
On how should banks response to the PSBs possible threats, Zaccheaus identified four ways. He advised the banks to consider accelerating to scale during PSB initial phase.
“I expect banks to leverage PSB initiating phase to drive rapid penetration into potential PSB sweet spots in payments and select rural locations. Banks that are desirous of sharing in the potential sweet spots should consider entering PSB space via holding companies and affiliates.
He, however, warned that direct play in the PSB space by traditional banks require a very strong business case.
In addition, he said that the banks can respond to PSB by driving digital adoption. They can do by leveraging digital platform and ecosystems to scale-up bank’s reach and distribution.
Besides, traditional banks can collaborate with PSBs, using their existing structure to assist with distribution footprint, regulation and compliance, FX servicing, government bonds, ATM operation and cash management.
On his part, Emmanuel Agha, the CEO of Innovectives said PSBs will deepen financial services but will not change the landscape significantly.
“The challenge with current providers is that they underestimate the BoP. Their needs may be simple but they are also varied. Their issues are not p2p transfer which PSB will major in.
“To bank the unbanked entail digitalization of basic transactional services that they are engaged in and the PSBs lack such capacity except they are owned and operated by Fintech,” he declared.
But, Deji Oguntonade, the divisional head, Fintech and Innovation at GTBank disagreed with Agha. Oguntonade said the PSBs are challenger banks.
“Yes they are, at least for the local money transfer arm of our business,” he quipped. He added that if these PSBs will operate strictly in rural, mostly unbanked locations, they may not pose a threat to the overall deposit business of commercial banks.
“Should their services be made available to all locations- rural and urban; then they may have a chance to disrupt the retail deposit business,” he declared.
According to the GTB executive, the safe conclusion of the various possibilities are that PSBs can become a challenger bank if they partner with the banks or the other financial service institutions allow them to issue loans, operate in urban locations, outside of rural areas and are able to provide their services without internet connection or at least payment for internet connection.
Nigeria Deposit Insurance Corporation (NDIC) has begun the final phase of liquidation for the defunct Premier Commercial Bank, initiating the payment of liquidation dividends to verified creditors, nearly 25 years after the bank’s closure.
Premier Commercial Bank had its operating license revoked by the Central Bank of Nigeria (CBN) on December 20, 2000, following findings of financial instability and regulatory non-compliance.
Since then, the NDIC has overseen the bank’s liquidation process under a winding-up order from the Federal High Court, which designated the corporation as the official liquidator.
In a public announcement, the NDIC invited all eligible creditors to visit any of its zonal offices between June 2 and June 27, 2025, to verify and claim their entitlements.
This move marks a critical milestone in the final settlement of claims related to the bank’s collapse.
To facilitate the verification process, creditors are required to present proof of deposit or shareholding, such as a passbook, chequebook, term deposit certificate, or bank statement.
Additionally, valid identification documents must be submitted, including a driver’s license, international passport, national identity card, NIN slip/card, voter’s card, or a formal identification letter from a traditional ruler or local government chairman.
The NDIC assured the public that the ongoing settlement is part of a broader effort to bring closure to longstanding claims resulting from Premier Commercial Bank’s liquidation. The process, according to the corporation, has been designed to ensure efficient disbursement to all verified stakeholders.
Premier Commercial Bank is one of 53 deposit money banks whose licenses were revoked by the CBN between 1994 and 2018 due to various violations and signs of financial distress.
These closures were followed by legal procedures appointing the NDIC to manage asset recoveries and creditor settlements.
By initiating this final phase of payment, the NDIC is reaffirming its commitment to financial system stability and depositor protection while calling on all affected individuals and institutions to complete verification processes promptly to receive their due compensation.
Securities and Exchange Commission (SEC) has directed all public companies and Registrars to stop treating unclaimed dividends older than 12 years as “statute-barred”, especially those dating from before the enactment of the Finance Act 2020.
The directive reaffirms the provisions of Section 60 of the Finance Act, which mandates that dividends unclaimed for over six years be transferred to the Unclaimed Funds Trust Fund (UFTF), where they remain accessible to shareholders pending claims.
The Commission said that shareholders are entitled to continue to claim their dividends that are not statute-barred (that is not above 12 years) before December 31, 2020 “when the Finance Act 2020, came into effect.”
According to the SEC in a Circular, “The attention of the Securities and Exchange Commission has been drawn to the fact that paying companies and their Registrars have continued to treat unclaimed dividends of public companies that are older than 12 years as being “statute-barred” without recourse to the provisions of the Finance Act 2020.
“In response to various inquiries on the subject, the Commission hereby clarifies as follows: The import of the provisions of Section 60 of the Finance Act 2020 (December 31, 2020), is that, where dividends declared by a public company quoted on the Nigerian Exchange Limited remained unclaimed for a period of six years or more, such dividends are expected to be transferred to the Unclaimed Funds Trust Fund (UFTF) to be held in trust and managed pending when the shareholder presents a claim for such unclaimed dividends.
“Pending the setting up and operationalisation of the UFTF by the Federal Government, pursuant to its powers under Sections 3 (4) (e) and 93 of the Investments and Securities Act 2025, the Commission hereby directs public companies and their Registrars to continue to honour all requests by shareholders for the payment of unclaimed dividends as described above, with effect from December 31, 2020”.
The Commission therefore directed public companies and Registrars to effect immediate compliance with the directive and submit periodic reports on same in the manner prescribed in the Commission’s Rules and Regulations.
Federal Inland Revenue Service (FIRS) has revised its Standard Operating Procedure (SOP) as part of efforts to improve consistency, transparency, and service delivery in tax administration across the country.
According to a statement on Monday in Abuja by Mr. Collins Omokaro, Special Adviser on Communication Strategy and Advocacy to the Executive Chairman of FIRS, the revised SOP offers a unified framework for core tax processes including registration, payment, audit, and enforcement.
“This is about people, experience, and impact. It’s a step toward a tax system that supports voluntary compliance and national development,” Omokaro said.
He explained that while FIRS field offices have long operated with good intentions, inconsistent methods across different locations often created confusion for taxpayers.
The revised SOP, he said, is designed to eliminate such disparities by providing a single, clear roadmap for operations in all of the Service’s over 300 offices nationwide.
More than just a procedural manual, the new SOP is described as a statement of institutional direction, reflecting values that define the future of the Service.
Omokaro quoted Dr. Zacch Adedeji, executive chairman of FIRS, as saying that “This SOP is not just a technical document—it is a declaration of who we are becoming as a service. It reflects our commitment to transparency and service to the Nigerian people.”
The SOP update is one component of a broader reform agenda underway at FIRS, which aims to transform the agency into a fully service-oriented institution.
The changes are also aligned with the ongoing digital transformation within the agency, which is intended to harmonize human and technological systems for faster, more reliable, and taxpayer-friendly service delivery.
Internally, the SOP is expected to enhance operational efficiency and provide a foundation for improved staff training, clearer guidance, and stronger evaluation systems. Omokaro noted that every FIRS employee is expected to study, implement, and embody the procedures outlined in the new document.
“With this rollout, every FIRS staff member has a clear mandate: study it, apply it, and embody it. That’s how we’ll earn the trust of Nigerians,” he said.
The SOP reform is being introduced as part of the Service’s broader mission to reposition itself as a modern tax authority grounded in accountability, consistency, and a shared sense of national purpose.
The move comes as the FIRS continues to modernize its processes, improve tax collection efficiency, and foster a culture of voluntary compliance—all aimed at strengthening revenue mobilization to support Nigeria’s development agenda.
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