CBN’s Ban on Fintechs’ New Accounts Sparks Concern among Nigerian Bank Customers

Concern has gripped bank customers in Nigeria following the recent directive from the Central Bank of Nigeria (CBN) that has banned mobile money operators and fintech firms from onboarding new customers. Notable players affected by this regulatory move include OPay, Palmpay, Kuda Bank, and Moniepoint.

Sources within these fintech companies, who shared insights on the condition of anonymity, have confirmed the temporary suspension of new account openings. The CBN’s decision is a result of a thorough audit of the Know-Your-Customer (KYC) procedures utilized by these firms amid concerns related to money laundering and terrorism financing.

Reports indicated that top heads of fintech firms were summoned to Abuja last week to address KYC-related issues, pointing to heightened regulatory scrutiny in the rapidly expanding sector. Meanwhile, the Bank Customers Association of Nigeria has expressed support for the CBN’s decision, stressing on the importance of robust regulatory compliance across all financial institutions.

Uju Ogubunka, the President of the association, emphasized the need for consistent regulatory standards between fintechs, microfinance banks, and deposit money banks to uphold the credibility of the financial system. He underscored the significance of adhering to KYC norms to enhance transparency and accountability.

Emmanuel Odunsi, a commentator on social media platform X, echoed support for the CBN’s move, citing the necessity for tightened KYC measures to deter fraudulent activities that exploit existing gaps in the system. This action by the CBN aligns with its commitment to ensuring financial integrity and stability.

The resonance of regulatory scrutiny also reflects in recent events such as Fidelity Bank’s restrictions on transfers to certain fintechs due to KYC concerns. This incident led to the introduction of new KYC regulations for all financial institutions, which appeared to target the burgeoning fintech sphere.

While the fintech industry has been instrumental in advancing financial inclusion goals in Nigeria, the CBN’s stance underscores the imperative of upholding security and compliance standards to safeguard the financial ecosystem. As the regulatory landscape evolves, fintech firms and other stakeholders are awaiting further directives to navigate this phase of scrutiny.

In response to the CBN’s directive, some customers have taken to social media to express apprehensions about the safety of their funds and the overall stability of their accounts on impacted platforms. This move has sparked various reactions among users, highlighting the interconnectedness of regulatory actions and customer sentiments in the financial realm.