Stop Adding New Clients; CBN Directs Fintech Companies

Fintech businesses have been told by the Central Bank of Nigeria (CBN) to cease accepting new clients until further notice.

A 2013 central bank regulation intended to promote financial inclusion that let Nigerians to open accounts without identity cards was superseded a few months ago when the CBN ordered all financial institutions to obtain ID cards prior to opening financial accounts.

Additionally, banks and mobile money providers were urged to remove unlicensed fintechs from their lists and stop them from taking direct deposits from customers by the Nigeria Inter-Bank Settlement System (NIBSS).

This decision from CBN was confirmed by one of the impacted fintech companies through a notice posted on their website.

“We’ve temporarily paused new signups on our platform,” the notification states. This indicates that you are not going to be able to create a new account at this time. We regret any inconvenience that this has caused you.

Although sources suggest that the CBN’s mandate concerned accounts purportedly utilized for illicit foreign exchange transactions, an unnamed source who talked with LEADERSHIP advised Fintech firms to mend their regulatory relationships.

The majority of fraud cases are handled by conventional banks. Why does CBN pursue Fintech companies consistently? The insider claimed, “I think Fintech companies would need to sit down and educate the regulators on how they operate.”