Some bank customers have expressed panic as the Central Bank of Nigeria (CBN) imposes a ban on mobile money operators and fintech firms from onboarding new customers. This directive impacts prominent fintech companies such as OPay, Palmpay, Kuda Bank, and Moniepoint, preventing them from opening new accounts until further notice.
According to undisclosed sources from three major fintech firms, the CBN’s decision stems from an ongoing audit of the Know-Your-Customer (KYC) process within the fintech sector. Recent months have seen increased scrutiny over concerns related to money laundering and terrorism financing.
The timing of this directive coincides with a court order obtained by the Economic and Financial Crimes Commission (EFCC) to freeze over a thousand bank accounts allegedly involved in illegal foreign exchange transactions.
The 85-page court order, obtained by The PUNCH, outlines the accounts suspected of illicit activities, granting the EFCC 90 days to conclude its investigation. President of the Bank Customers Association of Nigeria, Uju Ogubunka, voiced support for the CBN’s move, emphasizing the importance of regulatory compliance and integrity within the financial sector.
Part of the court document read, “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.”
The EFCC, in the motion marked FHC/ABJ/CS/543/2024 dated and filed April 24 by Iheanacho, was heard by the judge the same day in the interest of national interest. “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.”
While the CBN’s directive aims to strengthen regulatory oversight and combat financial crimes, it has sparked concerns among bank customers about the accessibility and reliability of digital financial services in Nigeria.
The President of the Bank Customers Association of Nigeria, Uju Ogubunka, backed the CBN’s move to suspend new account opening on the affected platforms.
He said, “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 behoves on 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.”