The new rules for shared services released on Monday also
apply to Payment Services Banks (PSBs) and other payment service providers
licensed by the financial regulator.
The apex bank said the companies should develop charges or
fees for services rendered by entities to one another within a group in order
to ensure cost efficiency and good corporate governance.
The CBN stated, “Nigerian banks with foreign parents and
banks within the non-operating financial holding company (HoldCo) structure
participate in centralized or shared services arrangements with their parent
companies and other entities in the group.
“The main drivers for sharing of services among group
entities are the need to ensure cost efficiencies, leverage existing expertise
and maintain consistency throughout the group. An intra-group charge is
billed to the benefitting group members,
in consideration of the services provided to them.”
It said the guidelines are necessary because “the absence of
standards for the application of costs
related to shared services and ensuing pricing arrangements has resulted in
uneven management of shared services in the banking industry and has been a
source of concern for regulators, especially in view of its governance,
financial and tax implications.”
Specifically, it stated the objectives of the guidelines to
include setting “out supervisory expectation in respect of shared services
arrangements between a parent company and its subsidiary; to ensure that the
fees received or paid reflect the services rendered, taking into account the
assets used and the risks assumed.
Other objectives of the rules, according to the financial
regulator, will ensure that financial institutions comply with the extant
transfer pricing regulation in Nigeria and reduce the operational cost of
benefitting institutions.