Senate panel urges CBN to strengthen oversight of fintechs

The Senate Committee on Banking, Insurance and Other Financial Institutions has urged the Central Bank of Nigeria (CBN) to strengthen its oversight of financial technology (fintech) firms to curb the rising cases of financial fraud in the country’s banking system. The committee also called on the apex bank to introduce stricter regulatory measures to tackle […]

The Senate Committee on Banking, Insurance and Other Financial Institutions has urged the Central Bank of Nigeria (CBN) to strengthen its oversight of financial technology (fintech) firms to curb the rising cases of financial fraud in the country’s banking system.

The committee also called on the apex bank to introduce stricter regulatory measures to tackle the growing threat of Ponzi schemes that have defrauded many Nigerians in recent years.

Chairman of the committee, Senator Adetokunbo Abiru, made the call during an investigative hearing into the operations of Ponzi schemes in Nigeria, with particular reference to the recent Crypto Bullion Exchange (CBEX) incident.

The hearing was jointly organised by the Senate Committees on ICT and Cyber Security, Capital Market, and Anti-Corruption and Financial Crimes.

Abiru, who represents Lagos East Senatorial District, advocated legislation that would clearly place fintech operations under the supervision of the CBN.

He said the Banks and Other Financial Institutions Act (BOFIA) 2020, which regulates Nigeria’s banking system, should be amended to accommodate technology-driven financial service providers.

“It is more effective to strengthen the BOFIA framework, modernise CBN supervisory powers and ensure 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, Office of the National Security Adviser and the Federal Ministry of Finance,” he said.

According to Abiru, the proposed amendment would empower the CBN to designate qualifying fintech and digital financial institutions as important institutions, establish a national registry to improve transparency and beneficial ownership disclosure, strengthen risk-based supervision tailored to technology-driven services, and promote data sovereignty and systemic stability.

He noted that while there have been suggestions to create a new standalone regulatory agency for fintech supervision, such a move could duplicate existing functions, create bureaucratic overlap, increase administrative costs and fragment regulatory authority in a sector that requires strong coordination.

Nigeria’s fintech sector has expanded rapidly over the past decade, driven by increased mobile phone penetration, digital payments and financial inclusion initiatives led by the CBN. However, the growth has also exposed regulatory gaps, with some digital platforms operating between banking, capital market and telecommunications regulations.

Recent cases, including the collapse of the Crypto Bullion Exchange (CBEX), have renewed concerns about consumer protection and regulatory oversight as Ponzi schemes continue to exploit digital platforms and social media to attract unsuspecting investors.