Senate Passes Bill to Bring Big Fintechs, Non-Bank Financial Institutions Under CBN Regulation
Proposed law seeks tougher oversight of financial technology operators, strengthens cybersecurity and risk management
Sunday Aborisade in Abuja
The Senate on Tuesday, passed for third reading, a bill meant to strengthen the regulatory oversight of Nigeria’s rapidly expanding financial technology sector.
The proposed amendment to the Banks and Other Financial Institutions Act (BOFIA) seeks to empower the Central Bank of Nigeria (CBN) to designate and regulate systemically important fintech companies and other non-bank financial institutions.
The proposed legislation is designed to bring financial institutions whose size, transaction volumes, customer base and operational interconnectedness could pose risks to the country’s financial stability under enhanced regulatory supervision.
The initiative, which seeks to amend the Banks and Other Financial Institutions Act, 2020, also provides for stricter corporate governance standards, cybersecurity safeguards, technology-risk management, operational resilience and greater transparency in the ownership structures of designated institutions.
The Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru, presented the committee’s report on the bill during plenary presided over by Senate President Godswill Akpabio.
The bill, SB. 959, is 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.
Abiru, who represents Lagos East Senatorial District, sponsored the legislation alongside members of the Senate Committee on Banking, Insurance and Other Financial Institutions.
The proposed amendment seeks to address emerging vulnerabilities in Nigeria’s financial services industry, particularly the growing influence of large technology-driven financial service providers whose operations have become increasingly interconnected with the traditional banking system.
Under the proposed framework, the CBN would be empowered to identify and designate qualifying non-bank financial institutions as Systemically Important Institutions (SIIs), subjecting them to enhanced prudential supervision.
The proposed legislation also seeks to establish clear criteria and regulatory procedures for determining which institutions qualify for the designation.
Beyond conventional financial regulation, the bill seeks to strengthen the capacity of the CBN to monitor risks arising from digital financial services, technological disruptions and operational failures that could have wider implications for the financial system.
Among its key provisions are stress testing, data-integrity assessments, enhanced regulatory reporting and supervisory access to relevant information and operational systems of designated institutions.
It also seeks to strengthen beneficial ownership disclosure and regulatory oversight of ownership and control structures, while providing enforcement mechanisms and sanctions for institutions that violate applicable regulatory requirements.
The committee’s report disclosed that the proposed legislation received broad support from relevant regulatory authorities, government agencies, financial institutions and professional bodies during a public hearing conducted on March 4, 2026.
The CBN supported the proposed strengthening of the statutory framework for supervising systemically important non-bank financial institutions.
The apex bank specifically highlighted the need for effective, risk-based supervision of large fintech operators, noting that their transaction volumes, customer bases and operational interconnectedness could have significant implications for financial stability.
The Federal Competition and Consumer Protection Commission (FCCPC) also supported stronger oversight of systemically important financial service providers but emphasised the need to maintain a clear distinction between prudential regulation, competition enforcement and consumer protection.
The commission urged appropriate coordination between the CBN and the FCCPC to prevent 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.
According to the committee, the submissions received from stakeholders generally supported the need to strengthen financial stability, encourage responsible digital innovation, improve regulatory coordination, promote operational compliance and protect users of financial services.
The committee explained that it had adopted a stakeholder-inclusive legislative approach to ensure that the proposed amendment reflected the concerns and recommendations of relevant institutions and members of the public.
It said the public hearing was preceded by advertisements in print and electronic media inviting memoranda from stakeholders and other interested members of the public.
The public hearing was declared open on behalf of the President of the Senate by the Senate Chief Whip, Senator Mohammed Tahir Munguno.
The committee recalled that the Senate had passed the bill through second reading on Thursday, December 4, 2025, before referring it to the Committee on Banking, Insurance and Other Financial Institutions for further legislative consideration.
The proposed amendment comes against the backdrop of the rapid expansion of digital financial services in Nigeria, with fintech operators playing increasingly significant roles in payments, transfers and other financial transactions.
The proposed regulatory framework is expected to address potential systemic vulnerabilities by ensuring that institutions whose operations could affect the wider financial system are subjected to appropriate supervision, regardless of whether they operate as conventional banks.
It also seeks to promote regulatory accountability through the establishment of an official register of designated Systemically Important Institutions.
The proposed legislation further underscores the importance of ensuring that technological innovation in the financial services industry does not undermine financial stability, consumer confidence and the integrity of the country’s financial system.
The Senate after the clause-by-clause consideration of the report at the Committee of the whole, subsequently passed the proposed legislation for third reading at plenary.
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