CBN Imposes N5 Million Fine on Illegal Agent Banking Activities, Strengthens Oversight Rules
The Central Bank of Nigeria (CBN) has stepped up enforcement against illegal agent banking activities, introducing hefty fines for breaches under its revised Agent Banking Guidelines. Any agent found engaging in non-permissible operations now faces a minimum penalty of N5 million, plus N100,000 for each day the violation continues, in addition to forfeiting any profit earned from such activities.
Under the updated rules, operating without a valid Super Agent license attracts an even stiffer penalty of N10 million, with N200,000 for each day the default persists. Financial institutions (FIs) and their directors are also under scrutiny: failure to obtain CBN approval or maintain proper accounting records can result in fines ranging from N2 million to N5 million, depending on the severity of the violation.
The CBN outlined several non-permissible activities to prevent abuse in the sector. These include Super Agents performing regular agent functions, agents offering banking services such as account opening, loan underwriting, investment or forex services, delegating operations to unauthorized entities, and using automated machines instead of human agents. Other activities deemed improper by the CBN also fall under this category.
In addition, the central bank is tightening eligibility requirements for agent bankers. Individuals or entities with non-performing loans within 12 months, bankrupt persons, companies under insolvency, and those with watch-listed Bank Verification Numbers (BVNs) are automatically disqualified from agent banking roles. This is aimed at ensuring that only financially and legally sound participants operate in the rapidly expanding sector.
The CBN explained that the revision of the Agent Banking Guidelines was necessary to keep pace with technological advancement and the growing complexity of agent banking. By consolidating all existing policies into a single, comprehensive document, the central bank aims to foster accountability, reduce fraud risks, and strengthen confidence in the nation’s agent banking ecosystem.
source: Vanguard