The Central Bank of Nigeria (CBN) has imposed a temporary suspension on several leading fintech companies, preventing them from adding new customers. This decision has sparked concern among existing users of platforms like OPay, Palmpay, Kuda Bank, and Moniepoint.
The suspension is backed by the Bank Customers Association of Nigeria, suggesting a move towards stronger regulatory oversight.
According to insider sources at the affected firms, who wished to remain anonymous, this measure stems from an intensive audit of the companies' compliance with Know-Your-Customer (KYC) protocols, amid rising fears of money laundering and terrorism financing within the sector.
The CBN's recent scrutiny follows discussions held last week in Abuja with fintech executives regarding KYC practices, although the CBN has yet to make an official statement.
Efforts to contact the CBN spokesperson, Hakama Ali Sidi, remained unanswered.
Coinciding with the CBN's directive, a significant legal development occurred as the Economic and Financial Crimes Commission (EFCC) secured a court order to freeze over 1,100 bank accounts linked to suspected illegal foreign exchange dealings and other financial crimes. This directive from the court allows the EFCC a 90-day period to wrap up its investigations.
Justice Emeka Nwite granted the freeze following a motion by EFCC counsel, Ekele Iheanacho, emphasizing the urgency and national interest of these measures.
Uju Ogubunka, President of the Bank Customers Association of Nigeria, endorsed the CBN's proactive stance. He stated that the same stringent regulations governing banks should also apply to fintechs to maintain the integrity of the financial system.
Critics of the current KYC processes, like Emmanuel Odunsi on X (formerly Twitter), argue that these platforms need more robust measures to deter scammers and fraudsters, who exploit weak verifications to perpetrate fraud.
In contrast, a source from Moniepoint has refuted claims linking the directive to deficiencies in KYC compliance, suggesting instead that the regulation targets accounts associated with cryptocurrency transactions.
This regulatory shake-up has triggered a wave of concern among customers, with many taking to social media to question the safety of their investments and the future accessibility of their funds.
As this regulatory landscape continues to evolve, the fintech sector faces a pivotal moment in aligning its operational standards with those expected by national regulators, aiming to foster a safer and more reliable financial environment for all stakeholders.
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