CBN Orders Kuda, Moniepoint, OPay and Palmpay to Stop New Account Openings

CBN, Central Bank of Nigeria, has directed Moniepoint, OPay, Kuda Bank, and Palmpay to restrict new account openings. This ensues after the recent freezing of 1,146 bank accounts linked to unauthorized forex transactions.

The account restriction is to prevent further illegal activity in the country.

Government Prohibits Opening Of New Fintech Bank Accounts

In response to the CBN directive, one of the fintech firms issued a statement before deleting it. It says the platform strictly adheres to the directives of the apex bank and other regulators.

Also, the platform stated that it recognizes the importance of preserving the financial system’s integrity and fostering transparent engagement. The other platforms have confirmed doing the same. They highlighted that outgoing and incoming transactions for existing users remain unaffected.

CBN Takes A Stand Against Fraudulent Activities In Fintech Banks

The Nigerian government has recently taken an unwavering stand in its fight against illegal activities. On April 26, 2024, a Nigerian Federal High Court granted an order allowing the Economic and Financial Crimes Commission (EFCC) to freeze at least 1,146 bank accounts.

The frozen accounts belong to people and businesses suspected of involvement in cryptocurrency fraud. Also, the investigation includes money laundering and terrorism financing.

CBN Takes Actions To Promote Financial Stability

In 2023, in an attempt to reduce fintech fraud, the fintech platforms implemented the use of NIN and BVN. It initially controlled fraudulent activities before fraudsters found other ways to continue the illegal activities.

The fraudsters opened fintech bank accounts using the identities of unsuspecting individuals.

According to a report, CBN issued the directive to freeze bank accounts not linked to a BVN or NIN by April 2024. This is to promote financial system stability. Additionally, the apex bank granted Unified Payments Services Limited, a fintech service provider, a PTSA license to counter financial crime and market irregularities.

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