The Central Bank of Nigeria (CBN) has lifted its restriction on new customer onboarding for digital banks, including OPay and Kuda Bank. This decision follows a temporary suspension imposed due to an ongoing audit of Know Your Customer (KYC) processes within the fintech sector.

The CBN’s move was triggered by concerns about potential money laundering and terrorism financing risks. It prompted a comprehensive review of KYC protocols among fintech firms, including OPay, Kuda Bank, PalmPay, and Moniepoint.

In separate statements, OPay and Kuda Bank confirmed the CBN’s approval to resume onboarding new users. OPay emphasized its dedication to regulatory compliance, data security, and fraud prevention. Kuda Bank highlighted its collaboration with the CBN to implement enhanced account controls in accordance with recent regulatory requirements.

The CBN’s decision to suspend new account openings initially caused panic among some bank customers. However, the Bank Customers Association of Nigeria supported the CBN’s directive, emphasizing the need for consistent regulatory standards across all financial institutions, including fintechs and microfinance banks.

The CBN’s directive coincided with a court order obtained by the Economic and Financial Crimes Commission (EFCC) to freeze over a thousand bank accounts suspected of involvement in illegal foreign exchange transactions and money laundering.

While some customers expressed concerns about the safety of their funds on these platforms, others welcomed the move, citing the need for stricter KYC processes to combat scams and fraudulent activities.

Fintech companies have played a crucial role in expanding financial inclusion in Nigeria. However, they have faced growing regulatory scrutiny, particularly regarding their account opening procedures.

The CBN aims to achieve 95% financial inclusion of the adult population by 2024. The temporary suspension of new account openings could potentially impact this goal, as fintechs contribute significantly to onboarding new customers.

The Central Bank of Nigeria’s decision to lift restrictions for OPay and Kuda Bank indicates progress in addressing KYC concerns within the fintech sector. However, the regulatory landscape remains dynamic, and further developments are expected as the CBN continues its efforts to balance financial innovation with robust risk management.