The Central Bank of Nigeria, CBN, has released the Framework for Regulatory Sandbox Operations, to ensure the safety and stability of the Nigerian Financial System, among other things.
It is also to promote the use and adoption of electronic payments and foster innovation in the payments system.
The CBN released the structure on its website on Wednesday and said one of the objectives was to increase the potential for innovative business models that advance financial inclusion.
The bank explained that it came up with the structure to ensure new and more flexible ways of engaging with the banking industry.
This, it said, is in view of increasing consumer appetite for payment solutions and emerging disruptive technology in the financial services space.
It said that the structure would enable the Bank stay abreast of innovations while promoting a safe, reliable and efficient Payments System to foster innovation without compromising on the delivery of its mandate.
“This Framework, therefore, defines the establishment, rules and operations of a Regulatory Sandbox for the Nigerian Payments System to promote effective competition, embrace new technology, encourage Financial Inclusion and improve customer experience, with a view to engendering public confidence in the Financial System,” it said.
The bank explained also that the structure was to reduce time-to-market for innovative products, services, and business models.
According to CBN, the framework will increase competition, widen consumers’ choice and lower costs.
It also said that it would ensure appropriate consumer protection safeguards in innovative products.
The CBN said that the structure would clearly define the roles and responsibilities of stakeholders and the operations of the Sandbox for the Nigerian Payments System industry.
The apex bank added that the framework would ensure adequate provisions in regulations to create an enabling environment for innovation without compromising on safety for consumers and the overall payments system.
Besides, it said that it would provide an avenue for regulatory engagement with FinTech firms in the payment space, while contributing to economic growth.