The Central Bank of Nigeria (CBN) has issued a directive instructing fintech companies to suspend onboarding new customers until further notice. This directive comes just a few months after the CBN mandated that all financial institutions collect ID cards prior to opening financial accounts. The new directive contradicts a 2013 Central Bank rule aimed at promoting financial inclusion, which allowed Nigerians to open accounts without identity cards.
Furthermore, the Nigeria Inter-Bank Settlement System (NIBSS) has urged banks and mobile money operators to remove unlicensed fintechs from directly accepting consumer deposits.
A prominently affected fintech company has confirmed the directive from the CBN on its website. The company posted a notice stating, “We have temporarily paused new signups on our platform. This means that you will be unable to open a new account at the moment. We apologize for any inconvenience this may cause.”
Although initial reports suggested that the CBN’s directive was related to accounts allegedly being used for illegal forex dealings, an anonymous source emphasized the need for fintech companies to establish better communication channels with regulators. The source expressed concerns over the disproportionate scrutiny faced by fintech companies, suggesting that traditional banks are also susceptible to fraudulent activities.
“Most of the fraud cases are carried out in the traditional banks. Why is CBN always after fintech companies? I think fintech companies would need to sit down and educate the regulators on how they operate,” the source stated.
The directive from the CBN has triggered discussions about the regulation of fintech companies and the measures required to ensure their compliance with existing laws and regulations. As the fintech sector continues to grow and transform Nigeria’s financial landscape, it is crucial for industry players and regulators to establish a constructive dialogue that fosters innovation while maintaining financial stability and consumer protection.
The CBN’s decision to halt the onboarding of new customers by fintech companies underscores the need for a balanced approach that addresses regulatory concerns without impeding the progress of the fintech industry. It remains to be seen how fintech companies will respond to this directive and engage with regulators to find suitable solutions that support both their operations and the broader financial ecosystem in Nigeria.
