SENATE REJECTS NEW REGULATORY AGENCY, GIVES CBN FULL FINTECH OVERSIGHT
Read Time:3 Minute, 42 Second
By: Balogun Ibrahim
The Senate on Wednesday called for a stronger regulatory framework that would place the Central Bank of Nigeria (CBN) at the forefront of supervising the country’s rapidly growing financial technology sector.
The upper chamber also pushed for tougher measures to combat the rising wave of Ponzi schemes across the nation.
Senator Mukhail Adetokunbo Abiru (Lagos East), chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, made the remarks during a one-day public hearing at the National Assembly in Abuja.
The hearing focused on the Banks and Other Financial Institutions Act (Amendment) Bill, 2025 (SB. 959), alongside an investigative session into the operations of Ponzi schemes in Nigeria, with particular reference to the recent Crypto Bullion Exchange incident.
The session was jointly organized by the Senate Committees on Banking, ICT and Cybersecurity, Capital Markets, and Anti-Corruption and Financial Crimes.
Senator Abiru said the proposed amendment aims to strengthen the legal framework under the Banks and Other Financial Institutions Act (BOFIA) 2020, providing a clear statutory basis for the designation, registration, and supervision of Systemically Important Institutions, particularly technology-driven financial service providers.
He added that the bill seeks to update BOFIA 2020 to reflect the realities of Nigeria’s evolving financial ecosystem, where fintech companies now handle large transaction volumes and manage sensitive financial data for millions of Nigerians.
Over the past decade, fintech firms — including mobile money operators, payment platforms, digital lenders, and settlement companies — have grown rapidly, significantly advancing financial inclusion in Nigeria.
However, concerns have emerged that the existing regulatory framework has not kept pace with the sector’s scale and systemic importance.
While the Central Bank of Nigeria (CBN) currently designates Systemically Important Financial Institutions, the framework primarily targets banks and does not fully cover large non-bank digital platforms, leaving regulatory gaps.
Senator Abiru said the proposed amendment would give the CBN the authority to designate qualifying fintechs and digital financial institutions as Systemically Important Institutions, create a national registry to improve transparency and beneficial ownership disclosure, strengthen risk-based supervision tailored to technology-driven services, and enhance data sovereignty and systemic stability.
“The question has arisen as to whether creating a new standalone regulatory agency would be a better approach for supervising fintechs,” he added.
“After careful consideration, it is clear that creating a completely new agency would duplicate existing functions, lead to bureaucratic overlap, raise administrative costs, and fragment regulatory authority in a sector where coordination and consistency are crucial,” Abiru said.
He added that fintech regulation is closely linked to monetary policy, payment system oversight, prudential supervision, Know-Your-Customer (KYC) and Anti-Money Laundering (AML) enforcement, as well as systemic risk monitoring — all functions that are already within the Central Bank’s mandate.
“It is far more effective to strengthen the BOFIA framework, modernize CBN supervisory powers, and mandate robust coordination with agencies such as the Securities and Exchange Commission, Nigerian Communications Commission, National Information Technology Development Agency, Corporate Affairs Commission, Federal Competition and Consumer Protection Commission, the Office of the National Security Adviser, and the Federal Ministry of Finance,” Abiru said.
The senator noted that integrating fintech regulation into BOFIA would prevent regulatory silos and ensure that digital financial services remain connected with the broader banking system.
Beyond fintech oversight, the Senate also intensified its scrutiny of Ponzi schemes and fraudulent digital investment platforms.
Abiru described the rising prevalence of such schemes as a serious threat to financial stability and public confidence. He highlighted the recent Crypto Bullion Exchange (CBEX) incident, which reportedly caused significant losses for many Nigerians, including young professionals, retirees, traders, small business owners, and students.
He warned that Ponzi schemes not only inflict personal hardship but also undermine trust in legitimate financial institutions, distort capital allocation, damage Nigeria’s financial reputation, and increase the risk of money laundering and illicit financial flows.
Following its investigation into regulatory gaps, institutional coordination, and the adequacy of existing laws, the Senate proposed stricter measures to curb fraudulent investment platforms.
Stakeholders who presented submissions at the hearing included representatives from the Central Bank of Nigeria, Nigerian Deposit Insurance Corporation, Economic and Financial Crimes Commission, Nigerian Communications Commission, Federal Competition and Consumer Protection Commission, Ministry of Finance Incorporated, and the Chartered Institute of Bankers of Nigeria, among others.
The Senate said it will review the memoranda submitted before issuing its final recommendations on the proposed BOFIA amendment and related regulatory reforms.
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