Fidelity Bank has blocked money transfers to digital microfinance banks like OPay, Moniepoint, Kuda, and PalmPay accounts over undue diligence of the Know Your Customer (KYC) exercise on their customers.
This was contained in a statement by the commercial bank, which explained that it is taking this step to protect its customers from fraud and other financial crimes.
According to the statement, it has been observed that some of these new banks are not conducting adequate KYC checks on their customers.
Fidelity Bank, therefore, pointed out that they cannot be sure of the identity of the people who are opening accounts with these neobanks, which could create a risk of fraud and other financial crimes.
The bank also added that it has tried to engage with these neobanks to address these concerns, but they have been unsuccessful. As a result, the bank has decided to block transfers to their accounts until they improve their KYC procedures.
Fidelity Bank, however, said that it regrets any inconvenience this may cause to its customers, but it believes that it is necessary to take this step to protect them.
The affected neobanks have responded to Fidelity Bank’s decision by saying that they are committed to KYC and that they are working to address the bank’s concerns.
They have also said that they are working with the commercial bank to unblock transfers as soon as possible.
While it is unclear how long Fidelity Bank’s ban on transfers to these neobanks will last, the bank has said that it will review its decision once the neobanks have improved their KYC procedures.
In the meantime, Fidelity Bank customers who need to transfer money to OPay, Moniepoint, Kuda, or PalmPay accounts can do so through other channels, such as bank branches, ATMs, or online banking.
