Implications of Global Standing Instructions (GSI) and Sandbox Policies for MFBs
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Presentation of
Samuel Oluyemi, Head Emerging Markets & OFIs, NIBSS
ACCION CONNECT SERIES
Implications of Global
Standing instructions (GSI) &
Sandbox Policies for MFBs
2
OUTLINE
CHALLENGES
REQUIREMENTS
REQUIREMENTS
BASICS OF SANDBOX
GSI ELEMENTS AND PROCESSES
3
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1
3
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Global Standing
Instruction &
Operations
Guidelines
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EXPOSURE DRAFT
Framework for
Regulatory Sandbox
Operations
G
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A
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S
1.
Promoting Innovation
2.
Effective Service Delivery
3.
Healthy Competition
4.
Financial Inclusion
G
O
A
L
S
1.
Facilitating improved credit repayment culture
2.
Reducing Non-Performing Loans
3.
Watch-listing consistent loan defaulters
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Payments System Management Dept.
I
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Financial Policy & Regulation Dept.
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DMBs, MMOs & PSPs
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ALL BANKS & OFIs
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July 15, 2020
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August 28, 2019
4
Confidence
Trust
Processes
Motives
Players
5
•
Life testing of new
Life testing of new
products or services in a
products or services in a
controlled/test regulatory
controlled/test regulatory
environment
environment
•
An environment that
An environment that
provides enabling
provides enabling
infrastructure or interfaces
infrastructure or interfaces
made available to outside
made available to outside
Innovator or Fintech
Innovator or Fintech
•
Regulations may or may
Regulations may or may
not grant regulatory
not grant regulatory
relaxations for the hinted
relaxations for the hinted
purpose of testing
purpose of testing
•
Programmer has liberty
Programmer has liberty
to build things from the
to build things from the
scratch
scratch
•
Sandbox policy will
Sandbox policy will
allow companies/idealist
allow companies/idealist
to test products or
to test products or
services in a closed
services in a closed
environment, geography
environment, geography
or among a set of users
or among a set of users
•
Regulatory oversight
Regulatory oversight
subject to appropriate
subject to appropriate
conditions and
conditions and
safeguards
safeguards
SANDBOX ENVIRONMENT
6
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GSI
Mandate
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KYC - BVN
Account Details
Validation
Full
Disclosure of
Information
Agreement
on Logic of
Debits
Loan
Default
Definition
in ToOL
Loan
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Comfort
CRMS
Default
Observation
Borrower’s
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GSI Mandate
Repository
Borrower’s
Engagement
/Arbitration
On agreed
ToOL
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This presentation by Samuel Oluyemi delves into the crucial aspects of Global Standing Instructions (GSI) and Sandbox Policies, emphasizing the significance of regulatory sandboxes for Microfinance Banks (MFBs). The talk covers the background, requirements, basics of sandbox, GSI elements and processes, challenges, and the objectives of promoting innovation, effective service delivery, healthy competition, and financial inclusion. Implementation timelines, loan eligibility, motives, sandbox environment details, as well as elements and processes related to GSI are also discussed.
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Presentation Transcript
ACCION CONNECT SERIES Implications of Global Standing instructions (GSI) & Sandbox Policies for MFBs Presentation of Samuel Oluyemi, Head Emerging Markets & OFIs, NIBSS
OUTLINE BACKGROUND REQUIREMENTS BASICS OF SANDBOX GSI ELEMENTS AND PROCESSES CHALLENGES 2
June 23, 2020 EXPOSURE DRAFT Framework for Regulatory Sandbox Operations July 13, 2020 CIRCULAR Global Standing Instruction & Operations Guidelines GOALS GOALS 1. Promoting Innovation 2. Effective Service Delivery 3. Healthy Competition 4. Financial Inclusion ISSUER Payments System Management Dept. TARGET DMBs, MMOs & PSPs RESPONSE DATE July 15, 2020 1. Facilitating improved credit repayment culture 2. Reducing Non-Performing Loans 3. Watch-listing consistent loan defaulters ISSUER Financial Policy & Regulation Dept. TARGET ALL BANKS & OFIs IMPLEMENTATION DATE August 1, 2020 LOAN ELIGIBILITY August 28, 2019 3
Motives Confidence Players Trust Processes 4
SANDBOX ENVIRONMENT Life testing of new products or services in a controlled/test regulatory environment An environment that provides enabling infrastructure or interfaces made available to outside Innovator or Fintech Regulations may or may not grant regulatory relaxations for the hinted purpose of testing Programmer has liberty to build things from the scratch Sandbox policy will allow companies/idealist to test products or services in a closed environment, geography or among a set of users Regulatory oversight subject to appropriate conditions and safeguards 5
ELEMENTS OF THE GSI Last resort by a Creditor Bank to recover past due obligations from defaulting Debtors Due Obligations ? Points of Recoveries Principal - YES Accrued Interests - YES Non-Performing Loans Substandard Loans Doubtful Loans Loss Deposit Accounts Investment Accounts Domiciliary Accounts Joint Accounts Electronic Wallets X Penal Charges - NO 6
KYC - BVN Account Details Validation THE PROCESSES On agreed ToOL Balance Enquiry/ GSI Recovery GSI Mandate Execution Borrower s Engagement /Arbitration GSI Mandate Repository CRMS Full Disclosure of Information Borrower s Default Notification Loan Granted on Comfort Loan Default Definition in ToOL Agreement on Logic of Debits Default Observation 7
S/N ISSUES CHALLENGES Regulation & Sandbox Environment 1. Who regulates MFBs This is an electronic platform at CBN that requires appropriate handshake with PFIs 2. CRMS Platform These are electronic platforms that requires regulatory permission and some levels of integration to meet GSI requirements This is a portal based service that requires some level of integration to NIBSS 3. BVN & Account Validation 4. GSI Mandate Agreement Industry Customer Accounts Database (ICAD) 5. This is a NUBAN acceptance platform that requires timely update 6. ICAD tagging with correct BVN This requires critical levels of responsibility and audit trail Connectivity to the Nigeria Central Switch 7. This is a technology based handshake that require Fintech s support Balance enquiry and debit advice received from NIBSS This will be an electronic trigger that requires handshakes between PFIs and NIBSS 8. 9. Reports/Returns Rendition This is an electronic based rendition 8
Nigeria Inter-Bank Settlement System Plc Thank You! ...improving the Nigeria Payments System 1230 Ahmadu Bello Way Victoria Island, Lagos, Nigeria Tel: +234 1 2716071-4 www.nibss-plc.com.ng
