NIGERIA : CBN lifts ban on new account openings for some fintechs

The Central Bank of Nigeria has lifted its ban on onboarding new customers imposed on five major fintech startups: Paga, OPay, Kuda, Palmpay, and Moniepoint, effective immediately.

This decision follows the expiration of a May 31 deadline given to these fintech companies to meet specific compliance requirements.

"All hands were on deck to fix this issue. Teams were working round the clock," a source close to the matter stated.

In April, the fintechs were instructed to suspend new account openings due to issues related to Know Your Customer (KYC) regulations. This directive was also linked to an ongoing crackdown on Peer-to-Peer cryptocurrency transactions in the country.

During the suspension, the affected fintechs advised their customers against engaging in cryptocurrency transactions on their platforms, as they were required to report such activities.

The fintech companies reiterated their commitment to adhering to the approved KYC verification processes and urged customers to comply with these verification procedures for all accounts.

The lifting of the ban comes after the Central Bank of Nigeria indicated that its restrictions on fintechs might last for months. At the 295th Monetary Policy Committee meeting, CBN Governor Olayemi Cardoso expressed confidence that the sector would soon return to normal operations under a stronger regulatory framework.

"I am confident that as time goes on, and hopefully in another couple of months, all these will be something of the past, and then you will see that sector going back into what they've been known to do before, but certainly with a very stronger regulatory framework," he said.

According to Cardoso, the apex bank engaged with numerous stakeholders regarding the need to enhance their operations, and the directive was part of broader efforts to prevent money laundering and illicit financial flows.

The recent restriction on fintechs appears to be part of renewed efforts to reinforce regulation in the rapidly growing sector. "Regulation is very critical in a sector that seems to have grown so incredibly rapidly," Cardoso emphasized during the MPC meeting.