Customers panic as CBN bans Opay, Palmpay, others’ new accounts

Since the Central Bank of Nigeria forbids mobile money providers, including fintech companies, from onboarding new clients, several bank customers have expressed fear.

The CBN directive was supported, nevertheless, by the Bank Customers Association of Nigeria.

The new rule prohibits the opening of new accounts until further notice for fintech companies, including OPay, Palmpay, Kuda Bank, and Moniepoint.

On Monday, the development was confirmed by credible sources from three prominent fintech companies, who asked not to be named since they were not allowed to talk.
A continuous examination of the fintechs' Know-Your-Customer procedures, which have been under fire in recent months due to worries about money laundering and terrorism funding, is what prompted the CBN to take this action.

It was reported that last week, the CBN called a few of the leaders of fintech companies to Abuja to talk about KYC-related concerns.

Concerning the directive to the fintech companies, the CBN has not yet made any public remarks. There was no response when attempts were made to contact the top bank.

As of the time this article was filed, Hakama Ali Sidi, the spokesperson for CBN, has not returned many calls to her phone number.

The directive also came at the same time as the court order that the Economic and Financial Crimes Commission (EFCC) was able to secure, freezing at least 1,146 bank accounts belonging to different people and businesses that were allegedly engaged in unlawful foreign currency operations.

On Monday, they were able to receive the 85-page court order (document), which included a list of the bank account details that were allegedly connected to illegal actions.

In granting the ex-parte motion filed by Ekele Iheanacho, the anti-graft agency's attorney, Justice Emeka Nwite also approved the commission's request to wrap up the probe in ninety days.

"That the applicant's (EFCC) application is hereby granted as prayed," stated a portion of the court document.

"That this honourable court hereby orders the freezing of the bank accounts listed in the schedule below, which are owned by different individuals who are under investigation for the crimes of money laundering, terrorism financing, and unauthorised dealing in foreign exchange, to the extent that the investigation will be for a period of ninety (90) days."

On April 24, Iheanacho filed a motion entitled FHC/ABJ/CS/543/2024, which was heard by the judge that same day in the interest of national interest by the EFCC. Section 34 of the EFCC Establishment Act of 2004, Section 7(8) of the Money Laundering Prevention and Prohibition Act of 2022, Section 44(2) and (K) of the 1999 Constitution, and under the inherent jurisdiction of the court.”
The CBN's decision to halt the creation of new accounts on the impacted platforms was supported by Uju Ogubunka, President of the Bank Customers Association of Nigeria.

In order to maintain the integrity of the financial institutions, he claimed that fintechs and microfinance banks must adhere to the same stringent laws that control deposit money banks.

"Anything that can cause disruptions to the system should not be allowed," he declared. I agree with the CBN's ruling if the platforms are being utilised for activities that are prohibited by law. Nothing about that seems improper to me. Companies now have an obligation to properly handle KYC.

Permit them to carry out their assigned duties. KYC is applicable to financial entities that accept deposits, such as banks. So that the authorities can comprehend what is happening and hold them responsible, it ought to also apply to them.

Emmanuel Odunsi on X, formerly Twitter, on the other hand, applauded the decision, pointing out the necessity of improved KYC procedures to stop fraud and frauds.

"They don't have very good KYC. Many con artists take advantage of these apps to trick victims.

"With users' consent, the majority of the accounts were made through phone number mining. Odunsi stated, "Almost all phone numbers are associated with an account.