CBN directs banks, fintechs to disclose ownership details, store payment data locally
The Central Bank of Nigeria (CBN) has directed banks, fintech companies and other financial institutions involved in digital payment services to disclose the Ultimate Beneficial Ownership (UBO) of their significant shareholders as part of efforts to strengthen transparency in the financial sector.
The apex bank said the directive is aimed at reducing market concentration risks, improving ownership transparency and enhancing the resilience of Nigeria’s payment ecosystem.
In a circular issued on Monday to Deposit Money Banks (DMBs), Payment Service Providers (PSPs), fintech firms and other regulated institutions, the CBN noted that the rapid expansion of electronic payment services has raised concerns about operational dependence, market dominance and ownership transparency.
According to the regulator, the growing adoption of digital financial services and the emergence of dominant players in key payment activities have also heightened concerns about the storage and management of critical payment data generated within Nigeria.
The CBN directed all affected institutions to maintain accurate and updated records of their Ultimate Beneficial Owners and make such information available whenever requested by the regulator.
The circular stated that all banks, payment service providers and other financial institutions with digital payment operations must comply with existing laws and regulations on Anti-Money Laundering, Combating the Financing of Terrorism and Counter-Proliferation Financing.
The bank also introduced a data localisation policy requiring all payment transaction data generated in Nigeria to be stored and managed within the country in line with relevant data protection laws.
Full compliance with the data localisation requirement is expected to take effect from January 1, 2027.
To promote competition and prevent excessive market dominance, the CBN unveiled new market structure rules for card issuing and merchant acquiring businesses.
Under the framework, any financial institution controlling more than 25 per cent of the card issuing market over a rolling 12-month period will be restricted to a maximum of 15 per cent share of the merchant acquiring market during the same period.
Likewise, institutions with more than 25 per cent market share in merchant acquiring activities will be limited to 15 per cent of the card issuing market.
The apex bank further directed regulated entities to submit monthly market share reports using prescribed templates and timelines.
The circular emphasised that financial institutions, whether operating independently or as part of a group, must comply with the new thresholds by December 31, 2026.
The CBN warned that it would closely monitor compliance and impose appropriate supervisory sanctions on institutions that fail to adhere to the new requirements in line with existing laws, regulations and guidelines.
