BD Insider 236: Nigerian Digital Banks Update Their Systems to Comply with Central Bank Rules

The Central Bank of Nigeria (CBN) has revisited the regulatory framework governing Neobank kyc compliance process.

This development ensues the CBN’s announcement at its 295th Monetary Policy Committee (MPC) meeting. The apex bank highlighted that mobile money operators can resume onboarding new customers in a few months.

Nigerian Neobanks KYC Compliance

The CBN raised concerns about the Neobank kyc compliance processes of mobile money operators earlier in April 2024. The apex bank questioned that these processes might be open to money laundering and terrorist financing activities.

Also Read: Branch Pro: Meet the First Neobank in Kenya

This development led to a directive halting new customer onboarding for neobank firms. This includes banks like Opay, Palmpay, Kuda Bank, and Moniepoint.

Nigerian Neobank KYC Compliance Processes

• Verification Process: To comply with the CBN’s new Neobank kyc compliance process, Opay and Kuda will deploy staff to physically verify the addresses of existing merchants registered on their platform. 

Kuda, complying with this, sent the following email to its customers. The email read,  “To comply with CBN Neobank kyc compliance process, all merchants with OPay Business must complete a physical address verification. So, shortly, our staff will be visiting your location to assist with this verification process.”

It further read, “For your security, please ensure that you verify the identity of our personnel to prevent any possibility of impersonation or fraud. Our staff will carry proper identification (Opay ID Card, Lark Business Card, BD tool, or General Agent Platform) for this purpose.”

• CBN’s Regulatory Measures: CBN Governor Cardoso reassured the public that the CBN’s actions were not intended to stifle the growth of fintech companies. He claims the process was to strengthen the onboarding procedures to avoid illegalities and illicit flow of money. 

• CBN’s Easing of Restrictions:  The CBN Governor also clarified the issue with the temporary pause on new customer onboarding. He stated it was a strategic measure to allow for collaboration on strengthening regulations within the rapidly expanding fintech sector. 

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