CBN Ban Opay, Palmpay, Others From New Account Openings

The Central Bank of Nigeria (CBN) has decided to forbid mobile money carriers, including fintech companies, from taking on new clients, which has left a number of bank customers alarmed.

The Bank Customers Association of Nigeria, however, has expressed support for the guideline issued by the CBN.

Fintech businesses such as OPay, Palmpay, Kuda Bank, and Moniepoint will be impacted by the restriction and will not be able to register new accounts until further notice. This development has been verified by trustworthy sources, who spoke on condition of anonymity from three well-known fintech companies.

According to reports, the CBN's decision is related to an ongoing assessment of fintech businesses' Know-Your-Customer, or KYC, procedures. These companies have been under increased scrutiny recently because of worries about money laundering and the funding of terrorism.

Several fintech executives are reported to have been called to Abuja by the CBN last week to discuss matters pertaining to KYC. The CBN hasn't, however, made any official remarks about the mandate to fintech companies.

This decree, ironically, corresponds with a court order that the Economic and Financial Crimes Commission (EFCC) was able to obtain, freezing at least 1,146 bank accounts that belong to different people and businesses that are allegedly engaged in unlawful foreign exchange operations.

The commission's request to wrap up the inquiry in 90 days was also approved by Justice Emeka Nwite in her decision on the ex-parte motion, which was filed by Ekele Iheanacho, the anti-graft agency's attorney.

A section of the court file said, “That the applicant's (EFCC) application is hereby granted as prayed.

“That an order of this honorable court is hereby made freezing the bank accounts stated in the schedule below, which accounts are owned by various individuals who are currently being investigated in a case involving the offenses of unauthorised dealing in foreign exchange, money laundering, and terrorism financing, to the extent that the investigation will be for a period of 90 (ninety) days.”

In the sake of national interest, the judge heard the EFCC's motion, designated FHC/ABJ/CS/543/2024, which was dated April 24 and filed by Iheanacho, “The motion was brought pursuant to 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.”

The Bank Customers Association of Nigeria's president, Uju Ogubunka, expressed support for the CBN's move to stop accepting new accounts on the impacted sites.

Ogubunka underlined that in order to protect the integrity of financial institutions, fintechs and microfinance banks must be subject to the same strict laws that regulate deposit money banks.

He declared, “Anything that can disrupt the system should not be permitted. If the platforms are being used for things that are against the regulations, I think the CBN decision is OK. I don't see anything wrong with that. It behooves the companies now to get their KYC right.

“Let them do what they are supposed to do. KYC applies to banks and other financial institutions that deposit money. It should also apply to them so that the regulators can understand what is going on and hold them accountable.”