Several bank customers have expressed fear because the Central Bank of Nigeria has prohibited fintech companies and mobile money providers from onboarding new clients.
The Bank Customers Association of Nigeria, nevertheless, supported the CBN directive.
The new rule prohibits fintech companies from opening new accounts until further notice, including OPay, Palmpay, Kuda Bank, and Moniepoint.
The recent move by the Central Bank of Nigeria to scrutinize fintech firms’ Know-Your-Customer processes is part of an ongoing effort to address concerns about money laundering and terrorism financing.
The CBN discussed tackling KYC-related issues with fintech executives in Abuja last week.
Simultaneously, the CBN’s directive coincided with a court ruling obtained by the Economic and Financial Crimes Commission (EFCC) to freeze approximately 1,146 bank accounts allegedly involved in illegal foreign exchange transactions.
Justice Emeka Nwite granted the EFCC’s request, allowing a 90-day investigation period.
This ruling followed an ex-parte motion presented by EFCC counsel Ekele Iheanacho stating the gravity of the offences, which include unauthorized foreign exchange dealings, money laundering, and terrorism financing.
The EFCC, in the motion marked FHC/ABJ/CS/543/2024 and filed by Iheanacho on April 24, was swiftly addressed by the judge on the same day, citing reasons for national security. The motion was presented by legal provisions specified in Section 44(2) and (K) of the 1999 Constitution, Section 34 of the EFCC Establishment Act 2004, Section 7(8) of the Money Laundering Prevention and Prohibition Act 2022, and under the inherent jurisdiction of the court.
He underscored the importance of applying stringent regulations to deposit money banks and fintechs to uphold the integrity of the financial sector.
In October 2023, Fidelity Bank restricted transfers to OPay, Palmpay, Kuda, and Moniepoint due to concerns regarding their KYC procedures.
Responding to this, the CBN introduced new KYC regulations for all financial institutions in November 2023, which seemed to target fintech startups.
A source within Moniepoint stated that the company had complied with the directive and suspended new account creation on their platform. However, the source denied involvement in KYC issues, attributing the action solely to a CBN regulation. They questioned why fintechs are consistently targeted in such circumstances.
Another OPay source, who wished to remain anonymous, stated they were carrying out the CBN’s instruction and could not provide additional information.
“To be honest, we have nothing to say. All we are doing is adhering to a mandate. The CBN has released its directive.
