CBN puts on hold new account openings by Kuda, Opay, Palmpay, other fintech

Bank customers in Nigeria have expressed apprehension following the Central Bank of Nigeria’s (CBN) recent ban on mobile money operators, including fintech firms, from onboarding new customers.

The directive, which affects prominent fintech companies like OPay, Palmpay, Kuda Bank, and Moniepoint, has raised concerns among consumers.

However, the Bank Customers Association of Nigeria has voiced support for the CBN’s directive, indicating a level of alignment with regulatory efforts.

Sources from three major fintech firms, speaking on condition of anonymity due to confidentiality constraints, confirmed the development.

The CBN’s action is reportedly tied to an ongoing audit of the Know-Your-Customer (KYC) process within the fintech sector. Recent months have seen increased scrutiny of fintechs over concerns related to money laundering and terrorism financing.

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Last week, the CBN summoned heads of fintech firms to Abuja for discussions on KYC-related issues, further indicating regulatory scrutiny in this space.

As of now, the CBN has not issued a public statement regarding the directive to fintech firms.

The silence from the CBN coincides with a court order obtained by the Economic and Financial Crimes Commission (EFCC) to freeze over 1,146 bank accounts allegedly involved in illegal foreign exchange transactions.

The court granted the EFCC 90 days to conclude its investigation into the matter. The document outlines the freezing of accounts owned by individuals and companies suspected of unauthorized forex dealings, money laundering, and terrorism financing.

The EFCC’s motion, heard by Emeka Nwite, was filed in the interest of national security and was supported by relevant legal statutes.

The convergence of these events underscores the ongoing regulatory efforts to ensure compliance within the financial sector, particularly concerning the integrity of financial transactions and the prevention of illicit activities.