Bank customers are on edge as the Central Bank of Nigeria (CBN) has imposed a ban on mobile money operators, including fintech firms, from onboarding new customers.
The Bank Customers Association of Nigeria has thrown its weight behind the CBN directive.
Affected by the ban are fintech giants such as OPay, Palmpay, Kuda Bank, and Moniepoint, who are now barred from opening new accounts until further notice.
In a confirmation from undisclosed sources within three major fintech firms, it was revealed to The PUNCH on Monday that the ban is indeed in effect.
The CBN’s action is reportedly linked to an ongoing audit of the Know-Your-Customer (KYC) process of these fintechs, amid concerns over money laundering and terrorism financing.
Last week, the CBN reportedly summoned heads of fintech firms to Abuja for discussions on KYC issues.
As of now, the CBN has not issued any public statement regarding the directive to the fintech firms. Efforts by The PUNCH to reach the apex bank for comment proved futile.
The timing of this directive coincides with a court order obtained by the Economic and Financial Crimes Commission (EFCC) to freeze over 1,100 bank accounts allegedly involved in illegal foreign exchange transactions.
The court order, obtained by The PUNCH, grants the EFCC 90 days to conclude its investigation.
President of the Bank Customers Association of Nigeria, Uju Ogubunka, supports the CBN’s move, emphasizing the need for strict regulations across all financial institutions to maintain integrity.
Meanwhile, Emmanuel Odunsi, expressing his approval on social media, highlighted the necessity for enhanced KYC processes to combat scams and fraudulent activities.
The CBN had previously introduced new KYC rules targeting fintech startups in November 2023, following concerns raised by Fidelity Bank regarding KYC processes.
While some fintech companies have complied with the directive, questions linger about the recurring targeting of fintechs by regulators.
With the pause in new account openings, the CBN’s ambitious target of achieving 95% financial inclusion by 2024 may face setbacks, given that these companies process approximately 100 new accounts daily.
Despite challenges, fintechs have played a pivotal role in expanding financial inclusion, deploying robust digital payment infrastructure facilitating billions of dollars in monthly transactions.
As fintech companies navigate this regulatory landscape, scrutiny over their account opening processes continues to mount.
