Kenya - Renew Authorization Letter to Engage in Mobile Phone Money Services

Advertisement

Procedure

Apply In Person

1. An application for renewal of the Authorization Certificate as a Payment Service Provider shall be made to the Central Bank of Kenya (CBK) at least two (02) months prior to the expiry of the current authorization certificate. Central Bank of Kenya (CBK) Office Location &Contact Details
2. The application shall be made in writing using a prescribed application form, obtainable at the Central Bank of Kenya (CBK) offices.
3. Upon obtaining the application form, the applicant should legibly complete the forms, attach the relevant supporting documentation as listed under the “Required Documents” section of this page. The complete file should be submitted to the Bank Supervision Department, Central Bank of Kenya (CBK) offices.
4. The application shall be accompanied by a non-refundable application fee of Kshs.5, 000.00 to the Central Bank by Bankers cheque or by such other mode of payment as the Central Bank may prescribe and proof of payment should be shared to the CBK, Bank Supervision Department office.
5. Upon submission of the application, the Bank Supervision Department office will check for discrepancies or ineligibility in the application documents. If a discrepancy that cannot be immediately corrected exists in any of the documents, the application and all the submitted documents will be returned to the applicant and should not be re-submitted until the discrepancy has been rectified corrected.
6. The Bank Supervision Department (CBK) for purposes of ascertaining whether the institute has been operating in accordance with standards as set by the Banking Act, may request additional information relevant to the application. In such a case, the information must be submitted within the stipulated time from the date of notification. Where the applicant fails to submit the required information, the CBK office shall reject the application.
7. The Bank Supervision Department (CBK) will respond within seven (7) working/business days of receiving the application file, by sending the applicant an acknowledgment receipt as proof of submission of the application and for future inquiry via email.
8. At this point the CBK, Bank Supervision Department Director will go through the application documents to verify their authenticity and if they meet the requirements for renewal.
9. Upon a successful assessment and fulfillment of all the requirements and where the CBK is satisfied that the applicant has met all the application requirements, the Bank shall;
10. Issue a letter of intent requiring the applicant to pay an Authorization renewal fee of Kshs.100, 000. Payment should be channelled to the Central Bank by Bankers cheque or by such other mode of payment as the Central Bank may prescribe and proof of payment should be shared to the CBK, Bank Supervision Department office.
11. Thereafter, an Authorization Certificate will be issued to the applicant thereby legally permitting the applicant to commence the business of payment services.

Note:

• Where the CBK rejects an application for authorization, the decision shall be communicated to the applicant citing the reasons for its decision. The CBK may upon rejection of an application, impose conditions to be complied with by the applicant before the applicant can re-submit the application for consideration.
• The CBK may also approve an application that has previously been rejected if the CBK is satisfied that the applicant has complied with all conditions imposed upon the applicant

Advertisement

Required Documents

• Complete and submit a certified Application Form 2 to CBK accompanied by all supporting documents, including;
• Certified copy of the Certificate of Incorporation and the memorandum and articles of association indicating core capital as per the First Schedule.
• Certified copy of the Tax Personal Identification Number (PIN) Certificate
• Certified copy of the valid license from the Communication Commission of Kenya.
• Certified copy of the management agreement where a custodial Trust relationship exists with the mobile payment service provider.
• The type of services to be offered as well as the program of operations to offer these services.
• A business plan (with details as specified in Annex 1 of the First Schedule) including an indicative budget for the first three financial years demonstrates that the applicant is able to operate efficiently and safely. Submit the business plan covering the following but not limited to;
  • Background
  • Governance structure including ownership;
  • Audited financial statements for at least three years;
  • Identity of directors and persons responsible for the management of the payment service provider, the custodial trustee.
  • Proposed structure and internal controls
  • The proposed Risk Management Policies and Procedures and internal systems manual, and
  • Legal and regulatory compliance function.
  • Description of-
    • the governance arrangements of the applicant and internal control mechanisms, including administrative, risk management, and accounting procedures, which demonstrates that these governance arrangements, control mechanisms, and procedures are proportionate, appropriate, sound, and adequate;
    • the internal control mechanisms which the applicant has established to comply with its anti-money laundering obligations as set out in the Proceeds of Crime and Anti-Money Laundering Act, the Prevention of Terrorism Act, and the relevant Regulations and guidelines;
    • the structural organization of the applicant including, where applicable, its intended use of agents, cash merchants, branches, and outsourcing arrangements, and its participation in a national or international payment.
  • Description of how the payment service provider shall settle the payment obligations arising from its provision of electronic retail transfers;
  • Verified official notification of the company's registered place of business, including the prospective places of business (Head Office, branches, agency, and outlets, if any)
  • Terms and conditions that will apply to its customers, agents, and cash merchants;
  • Current tax compliance certificate from the Kenya Revenue Authority;
  • The latest report from the Credit Reference Bureau;
  • Where the applicant is a subsidiary of a foreign company, a letter of no objection from the home regulatory authority recommending them to establish a payment system in Kenya should be obtained;
  • Provide evidence that the payment service provider holds the initial capital set out in the First Schedule.
    • Evidence should be reflected in a bank statement of a licensed bank or microfinance institution indicating the isolated funds and/or Government of Kenya Treasury Bills and Bonds not under lien
    • Evidence should either be in the name of the company and/ or the promoters/ shareholders of the company
    • The promoters/ shareholders should give the Central Bank authority to verify the authenticity of the bank statement directly from the bank or microfinance institution.
    • The promoters/ shareholders should provide the distribution or allocation (ultimate beneficiaries, citizenship, amount, and percentage) of core capital to each individual promoter/ shareholder and/ or company, indicating significant shareholders/ promoters (owning at least 5% of the share capital)
• Pay a non-refundable application fee of Kshs.5, 000.00 to the Central Bank by Bankers cheque or by such other mode of payment as the Central Bank may prescribe.
• Duly completed and submit the Fit and Proper Forms for all significant shareholders, Trustees, Directors, and Managers in control of the payment service provider.
• Any other documents or information as the CBK may require.

Office Locations & Contacts

Central Bank of Kenya - Head Office
Haile Selassie Avenue
P.O Box 60000 – 00200,
Nairobi, Kenya
Tel / Fax: +254 20 286 0000
Phone: +254 20 286 1000, +254 20 286 3000, +254 709 081 000, +254 709 083 000
Email: [email protected]
CBK Contact Details

Eligibility

• Mobile phone companies offering payment services are eligible to apply.

Fees

• Non-refundable application fee of Kshs.5, 000.00 and an Authorization renewal fee of Ksh 100,000.00.
• Payment should be channeled to the Central Bank by Bankers cheque or by such other mode of payment as the Central Bank may prescribe.

Validity

• The validity of the Authorization certificate shall be mentioned on the document and shall remain valid for that stipulated period unless suspended, revoked, or cancelled by the Central Bank of Kenya.
• The application to renew the Authorization Certificate should be made to the Central Bank of Kenya within two (02) months before the expiration of the current authorization certificate.

Documents to Use

Please attach documents that can be used by people. e.g. links

Sample Documents

Please attach sample completed documents that would help other people.

Processing Time

• The time frame for processing the application is usually within seven (07) Working days.

Related Videos

Videos explaining the procedure or to fill the applications.
Attach videos using the following tag <&video type='website'>video ID|width|height<&/video&> from external websites.
Please remove the '&' inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver,
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is dkisplayed.
e.g In the following url 'http://www.youtube.com/watch?v=Y0US7oR_t3M' Video ID is 'Y0US7oR_t3M'.

Instructions

Please provide other instructions related to the certificate/documents.
e.g. The state office holds birth records since January 1908.

Required Information

• Name of the company
• Contact Details
• Physical Address
• Current Authorization certificate details
• Details business plan
  • Background
  • Governance structure including ownership;
  • Audited financial statements for at least three years;
  • Identity of directors and persons responsible for the management of the payment service provider, the custodial trustee.
  • Proposed structure and internal controls
  • The proposed Risk Management Policies and Procedures and internal systems manual, and
  • The legal and regulatory compliance function
• Declaration by the applicant/company stamp

Need for the Document

• Mobile phone companies desiring to offer payment services are required to be registered and obtain an authorization certificate from the Central Bank of Kenya to be able to commence such operation.
• No person can carry out a business that offers mobile money service unless he has a valid authorization certificate. Therefore one needs to renew their license to continue with operations.

Information which might help

The mobile phone money transfer operators are authorized as Payment Service Providers by the Central Bank of Kenya. Payment Service Providers are defined as:

• A person, company, or organization acting as a provider in relation to sending, receiving, storing, or processing of payments or the provision of other services in relation to payment services through any electronic system;
• A person, company, or organization which owns, possesses, operates, manages, or controls a public switched network for the provision of payment services; or
• Any other person, company, or organization that processes or stores data on behalf of such payment service providers or users of such payment services.

Other uses of the Document/Certificate

Please explain what are other uses for obtaining this document/certificate.
e.g. Birth Certificate can be used as proof of identity.

External Links

Guidelines for Application for the Authorisation of Payment Service Providers
Laws of Kenya Link

Others

More information which might help people.