The Central Bank of Nigeria (CBN) has announced plans to reverse its recent ban on fintech apps, including OPay, PalmPay, Kuda Bank, and Moniepoint, from opening new customer accounts. This decision was revealed by CBN Governor Olayemi Cardoso at the 295th Monetary Policy Committee (MPC) meeting held in Abuja on May 21, 2024. The ban, initially imposed due to irregularities in the Know Your Customer (KYC) processes, is expected to be lifted in the coming months.
The CBN’s decision to suspend new customer enrollments by fintech firms was driven by concerns over their involvement in illicit financial transactions, particularly via cryptocurrencies. Governor Cardoso emphasized the need for these fintech companies to strengthen their operations to prevent money laundering and other illegal financial activities.
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“These are remedial measures that will help that sector to tighten up on onboarding and even existing clientele base,” Cardoso stated.
Cardoso assured that the CBN’s actions are part of broader efforts to improve the financial sector’s regulatory framework. He denied any intention to clamp down on fintech operations, highlighting the CBN’s pride in the achievements of fintech firms over the past year. The CBN aims to support and strengthen these companies while ensuring robust regulatory oversight to prevent illicit flows within the sector.
“The fintechs have not been singled out for any exceptional kind of treatment. Regulation is very critical in a sector that has grown so incredibly rapidly,” Cardoso said.
The CBN has been working closely with security agencies to identify areas within the financial sub-sector that require stricter regulations and enhanced surveillance. Cardoso highlighted the importance of this collaboration in addressing issues related to money laundering and illicit financial flows.
“We felt the need to pause and collaborate with different stakeholders to strengthen regulations, not to put them out of business,” he explained. Cardoso also reassured that no fintech licenses have been revoked during this regulatory review process.
The CBN suspended daily Cash Reserve Requirement (CRR) debits for banks in a related development. This move, disclosed in a letter signed by Adetona Adedeji, Acting Director of the Banking Supervision Department, aims to adopt an updated CRR mechanism to enhance banks’ capacity for planning and monitoring in alignment with CBN records.
