CBN Imposes Strict Penalties to Combat Illegal Banking Agents

CBN Imposes Strict Penalties to Combat Illegal Banking Agents

CBN Introduces Strict Penalties in New Agent Banking Guidelines with N5 Million Base Fine

The Central Bank of Nigeria (CBN) has unveiled comprehensive revisions to its Agent Banking Guidelines, introducing hefty penalties for violations as part of efforts to strengthen regulation in the rapidly expanding agent banking sector.

Under the new framework, operators found engaging in unauthorized activities will face minimum fines of N5 million, plus daily penalties of N100,000 until compliance is achieved. The guidelines specifically target unauthorized agent banking operations and aim to consolidate existing policies into a single regulatory framework.

The penalties escalate for more serious violations, with operating without a Super Agent license now carrying a N10 million fine plus N200,000 per day of continued violation. The CBN has mandated that any profits derived from unauthorized operations must be surrendered.

Financial institutions face their own set of consequences, including a N2 million fine for failing to obtain required approvals or “No Objection” letters. This penalty extends individually to directors and senior managers found responsible. Institutions that fail to maintain proper accounting records will be fined a minimum of N5 million, while individual staff members involved in such violations face personal penalties of at least N2 million.

The guidelines explicitly prohibit several activities, including:
– Super Agents directly providing agent banking services
– Agents performing core banking functions like account opening or loan processing
– Unauthorized delegation of agent duties
– Use of automated systems as agents
– Foreign exchange transactions

The CBN has also established strict eligibility criteria, disqualifying individuals or organizations with recent non-performing loans, bankruptcy history, ongoing insolvency proceedings, or flagged Bank Verification Numbers (BVN).

To regulate daily operations, the CBN has implemented transaction limits of N1.2 million for agent Point of Sale (PoS) operations, while individual customers are restricted to N100,000 in daily transactions.

The updated guidelines reflect the CBN’s response to rapid technological advancement and growth in agent banking. This comprehensive framework aims to ensure proper oversight of the sector while promoting financial inclusion across Nigeria.

In related developments, the federal government has announced plans for security agencies to take action against unregistered PoS operators who fail to comply with Corporate Affairs Commission (CAC) registration requirements.

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