Amidst concern and uncertainty, the Central Bank of Nigeria’s recent decision to prohibit mobile money operators and fintech firms from enrolling new customers has triggered panic among some bank customers. The directive impacts prominent fintech players such as OPay, Palmpay, Kuda Bank, and Moniepoint, preventing them from opening new accounts until further notice.
While bank customers have expressed apprehension, the Bank Customers Association of Nigeria has lent its support to the CBN directive. Sources within major fintech companies, speaking anonymously due to restrictions.
The CBN’s action is reportedly linked to an ongoing audit of the Know-Your-Customer (KYC) process of fintechs, which have faced scrutiny over concerns related to money laundering and terrorism financing. Despite summoning fintech heads to Abuja for discussions on KYC issues, the CBN has yet to comment publicly on the directive.
Coinciding with the CBN’s move is a court order obtained by the Economic and Financial Crimes Commission (EFCC) to freeze over 1,100 bank accounts allegedly involved in illicit foreign exchange transactions. The EFCC’s motion, heard on the same day it was filed, aims to conclude investigations within 90 days.
Uju Ogubunka, President of the Bank Customers Association of Nigeria, supports the CBN’s decision, emphasizing the need for stringent regulations to maintain the integrity of financial institutions. However, some individuals, like Emmanuel Odunsi, welcome the move, citing concerns about the efficacy of fintechs’ KYC processes in preventing scams and fraud.
Fintech companies have faced previous regulatory actions, such as Fidelity Bank’s block on transfers to certain platforms in 2023, prompting the CBN to introduce new KYC rules. Despite compliance efforts, concerns persist, with some sources suggesting the focus on fintechs may extend beyond KYC to issues like cryptocurrency transactions.
The CBN’s directive, while aimed at bolstering regulatory compliance, may impact its ambitious target to increase financial inclusion. Fintechs have played a crucial role in this effort, facilitating digital payment infrastructure and serving millions of businesses. However, the current directive has prompted a temporary halt in onboarding new customers as companies await further instructions from the CBN.
Customers, meanwhile, have taken to social media to voice their concerns over the safety of their funds, questioning the reliability of these platforms amidst regulatory scrutiny.
