Senate passes bill to strengthen CBN regulation of fintechs

By Henry Umoru ABUJA – The Senate has passed a bill seeking to strengthen the regulatory oversight of major financial technology companies and other non-bank financial institutions in Nigeria. The proposed legislation will empower the Central Bank of Nigeria (CBN) to designate qualifying financial technology operators and other non-bank institutions as Systemically Important Institutions (SIIs), subjecting them to enhanced regulatory supervision.

The bill, SB.959, titled A Bill for an Act to Amend the Banks and Other Financial Institutions Act, No. 5 of 2020, to Provide for the Designation, Registration and Enhanced Supervision of Systemically Important Institutions; and for Other Related Matters, was passed on Tuesday after clause-by-clause consideration at the Committee of the Whole. Its passage followed the presentation of a report by the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Adetokunbo Abiru (APC, Lagos East).

Under the proposed amendment, the CBN will be empowered to identify and designate non-bank financial institutions as systemically important based on factors such as their size, transaction volumes, customer base and interconnectedness with the wider financial system. The legislation also provides for the establishment of an official register of designated institutions and enhanced prudential supervision to address potential risks to Nigeria’s financial stability.

It seeks to subject major fintech operators and other qualifying institutions to stricter requirements on regulatory compliance, corporate governance, cybersecurity, technology-risk management and operational resilience. Other key provisions include stress testing, data-integrity assessments, enhanced regulatory reporting and supervisory access to relevant information and operational systems of designated institutions.

The bill also seeks to strengthen beneficial ownership disclosure, improve transparency in ownership and control structures, and establish enforcement mechanisms and sanctions for institutions that violate regulatory requirements. Presenting the committee’s report, Abiru said the proposed amendment was designed to address emerging vulnerabilities in Nigeria’s financial services sector, particularly the growing influence of large technology-driven financial service providers whose operations had become increasingly interconnected with traditional banking institutions.

He said the legislation would strengthen the CBN’s capacity to monitor risks arising from digital financial services, technological disruptions and operational failures that could have wider implications for the financial system. Abiru disclosed that the proposed amendment received broad support from regulatory authorities, government agencies, financial institutions and professional bodies during a public hearing conducted on March 4, 2026.

According to the committee’s report, the CBN supported the proposed strengthening of the statutory framework for supervising systemically important non-bank financial institutions, particularly large fintech operators whose transaction volumes, customer bases and interconnected operations could affect financial stability. The Federal Competition and Consumer Protection Commission (FCCPC) also supported stronger oversight but called for a clear distinction between prudential regulation, competition enforcement and consumer protection.

The commission urged coordination between the CBN and FCCPC to avoid duplication of regulatory responsibilities and ensure that the proposed framework promotes fair competition while protecting consumers. Other institutions that supported the bill included the Nigeria Deposit Insurance Corporation (NDIC), Nigerian Communications Commission (NCC), Ministry of Finance Incorporated, Federal Ministry of Industry, Trade and Investment, Bank of Industry and Economic and Financial Crimes Commission (EFCC).

Several banks and other financial institutions also endorsed the proposed amendment. The committee said stakeholders generally supported measures to strengthen financial stability, encourage responsible digital innovation, improve regulatory coordination, promote operational compliance and protect users of financial services. It added that a stakeholder-inclusive legislative approach was adopted to ensure that the proposed amendment reflected the concerns and recommendations of relevant institutions and members of the public.

The committee disclosed that the public hearing was preceded by advertisements in print and electronic media inviting memoranda from stakeholders and other interested members of the public. The hearing was declared open on behalf of the President of the Senate by the Senate Chief Whip, Senator Mohammed Tahir Monguno (APC, Borno North). The bill had earlier passed second reading on Thursday, December 4, 2025, before being referred to the Senate Committee on Banking, Insurance and Other Financial Institutions for further