The Senate on Wednesday approved the reinforcement of the authority of the Central Bank of Nigeria (CBN) over the fast growing and fedging fintech industry, rapidly enchroaching into the hitherto exclusive areas of operations of the banking industry.
Turning down proposals to establish a separate regulatory body for the institutions, the red legislative chamber, rather reinforced the authority of CBN over other oversight agencies in supervising digital financial services.
But some analysts have expressed fears over the ability of CBN, condidering the increasing role and sophistication of operations of banks and non bank financial institutions, to provide the required supervision and monitoring of the, also, fastly expanding industry.
They cited the regulation of digital assets, arguing that, although, it has entered a more coordinated phase, after years of fragmented oversight between CBN and the Securities and Exchange Commission (SEC).
While both regulators were exercising distinct statutory mandates, with the CBN overseeing payment systems and financial stability, and the SEC supervising investment and capital market instruments, the absence of clear alignment created uncertainty for market participants, until recently that the country has started witnessing initiatives by both agencies signalling a strategic shift towards cooperation, aimed at achieving regulatory stability, investor confidence, and market integrity in Nigeria’s growing crypto-asset ecosystem
Also, the supervision of Microfinance banks, they further argue, seems less satisfactory as some of them allegedly operate for more than six months before full supervision by CBN commences, calling for the amendment of some provisions of BOFIA, particularly as they relate to the duration of commencement of operations and rendition of reports to the regulators.
However, agencies and institutions that submitted memoranda for the deliberations on the activities of the fintech industry by the Senate included the Nigeria Deposit Insurance Corporation, the Economic and Financial Crimes Commission, the Nigerian Communications Commission, the Federal Competition and Consumer Protection Commission, the Ministry of Finance Incorporated and the Chartered Institute of Bankers of Nigeria, alongside representatives of the CBN.
At the conclusion of proceedings, the Senate reiterated its resolve to reinforce Nigeria’s financial regulatory framework, shield citizens from exploitation and ensure that fintech innovation thrives within a coordinated supervisory structure anchored by the CBN.
But Senate’s resolution emerged from deliberations at a one-day public hearing held at the National Assembly on the Banks and Other Financial Institutions Act (Amendment) Bill 2025 (SB. 959).
The session also featured an investigative review into the growing menace of Ponzi schemes, with specific attention to the recent collapse linked to the Crypto Bullion Exchange (CBEX).
The hearing was convened jointly by the Senate Committees on Banking, Insurance and Other Financial Institutions; ICT and Cyber Security; Capital Market; and Anti-Corruption and Financial Crimes, a move lawmakers said underscored the urgency of preserving the credibility of Nigeria’s financial system amid accelerating digital transformation and recurring fraud incidents.
Speaking at the session, Tokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, explained that the proposed amendment is designed to plug regulatory loopholes by expressly incorporating technology-driven financial service providers into a more robust statutory regime under the CBN.
Abiru observed that fintech operators, including digital lenders, mobile money providers, payment gateways and settlement platforms now handle enormous transaction volumes and serve millions of Nigerians.
While acknowledging their contribution to financial inclusion, he cautioned that the existing legal structure has not evolved sufficiently to match their operational scale, complexity and systemic relevance.
He pointed out that the present framework for identifying Systemically Important Financial Institutions is largely tailored to conventional banks and does not adequately cover large, data-centric non-bank platforms.
According to him, this regulatory blind spot creates potential threats to financial stability, consumer protection, data governance and even national security.
Under the amendment, the CBN would be empowered to classify eligible fintech and digital financial institutions as Systemically Important Institutions.
The bill also proposes the creation of a national registry to boost transparency and disclose beneficial ownership, alongside enhanced risk-based supervision suited to technology-enabled financial services.
Abiru firmly rejected calls for a new fintech regulator.
“Establishing a new agency would duplicate functions, create bureaucratic overlap, increase administrative costs and fragment regulatory authority in a sector where coordination and coherence are essential,” he said.
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He argued that oversight of fintech operations is inherently tied to monetary policy, payments regulation, prudential supervision, Know-Your-Customer requirements, Anti-Money Laundering compliance and systemic risk surveillance, responsibilities that already fall within the purview of the CBN.
Rather than setting up an additional bureaucracy, Abiru maintained that updating the BOFIA framework and institutionalising structured collaboration between the apex bank and 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 would provide a more efficient and cohesive regulatory model.
The Senate also ramped up scrutiny of fraudulent investment schemes and digital Ponzi operations, characterising their spread as a significant danger to investor trust and economic stability.
Lawmakers cited the fallout from CBEX as a sobering example of the damage inflicted by schemes that lure participants with promises of extraordinary returns. Submissions presented at the hearing indicated that professionals, retirees, traders, small-scale entrepreneurs and students were among those who incurred substantial losses.
Beyond individual hardship, senators warned that such schemes undermine confidence in legitimate financial institutions, distort capital flows, tarnish Nigeria’s financial reputation and heighten vulnerability to money laundering and illicit financial activities.
However, the analysts were unanimous on their submissioms that most of the regulatory, security and supervisory agencies, particularly for the banking and digital space need to be strengthened and to be more responsive and accountable.