Senate moves to tighten CBN oversight of major fintech operators
Senate moves to tighten CBN oversight of major fintech operators
The Central Bank of Nigeria (CBN) is set to gain stronger regulatory powers over major financial technology companies and other non-bank financial institutions whose operations could threaten the stability of the country’s financial system.
This follows the passage of a bill by the Senate on Tuesday, seeking to bring such institutions under enhanced supervision, with provisions for stricter compliance, corporate governance, cybersecurity and risk management.
The proposed amendment to the Banks and Other Financial Institutions Act (BOFIA), 2020, empowers the apex bank to identify and designate financial technology companies and other non-bank operators as Systemically Important Institutions (SIIs) based on their size, transaction volumes, customer base and interconnectedness with the wider financial system.
Under the proposed law, institutions that meet the designation criteria would be subjected to additional regulatory requirements, including stress testing, data integrity assessments, regular reporting and supervisory access to their operational systems.
The bill, SB. 959, titled A Bill for an Act to Amend the Banks and Other Financial Institutions Act, No. 5 of 2020, to Provide for the Designation, Registration and Enhanced Supervision of Systemically Important Institutions; and for Other Related Matters, was presented for consideration by the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru.
Abiru, who represents Lagos East, sponsored the legislation alongside members of the committee.
Presenting the report during plenary presided over by Senate President Godswill Akpabio, the committee chairman said the proposed amendment was intended to address emerging risks in the financial services sector arising from the growing influence of technology-driven financial service providers.
The legislation also provides for stronger disclosure of beneficial ownership, transparency in ownership and control structures, operational resilience and safeguards against technology-related disruptions.
It further establishes enforcement provisions and sanctions for designated institutions that fail to comply with regulatory requirements.
The committee disclosed that the bill received broad support from regulatory authorities, government agencies, financial institutions and professional bodies during a public hearing held on 4 March 2026.
Among the institutions that endorsed the proposed amendment was the CBN, which supported the establishment of a stronger statutory framework for supervising non-bank financial institutions capable of posing systemic risks.
The apex bank specifically identified the need for effective, risk-based supervision of large fintech operators, given the scale of their transactions, expanding customer base and growing interconnectedness with conventional banking institutions.
However, the Federal Competition and Consumer Protection Commission (FCCPC), while supporting stronger regulation, called for a clear distinction between prudential supervision, competition enforcement and consumer protection.
The commission urged closer coordination between the CBN and the FCCPC to avoid overlapping regulatory responsibilities and ensure that stronger oversight does not undermine fair competition or consumer rights.
Other institutions that supported the bill included the Nigeria Deposit Insurance Corporation (NDIC), the Nigerian Communications Commission (NCC), the Ministry of Finance Incorporated, the Federal Ministry of Industry, Trade and Investment, the Bank of Industry and the Economic and Financial Crimes Commission (EFCC).
Several commercial banks and other financial institutions also endorsed the proposed legislation.
According to the committee, the submissions received from stakeholders largely emphasised the need to safeguard financial stability, encourage responsible digital innovation, strengthen regulatory coordination and protect consumers of financial services.
It said the legislative process was designed to accommodate the concerns of relevant stakeholders and members of the public.
The committee explained that advertisements had been placed in print and electronic media ahead of the public hearing to invite memoranda from interested individuals and institutions.
The hearing was declared open on behalf of the Senate President by the Senate Chief Whip, Senator Mohammed Tahir Munguno.
The Senate had passed the bill for second reading on 4 December 2025, and subsequently referred it to the banking committee for further legislative consideration.
The amendment comes amid the rapid growth of digital financial services in Nigeria, where fintech companies have become major players in payments, electronic transfers and other financial transactions.
The proposed framework seeks to ensure that financial institutions are subjected to regulatory scrutiny based on the risks their operations pose to the financial system, rather than solely on whether they operate as conventional banks.
It also provides for the establishment of an official register of designated Systemically Important Institutions to strengthen regulatory accountability and monitoring.
Following consideration of the committee’s report and a clause-by-clause examination of the bill by the Committee of the Whole, the Senate passed the legislation for third reading at plenary.
