CBN Orders Banks, Fintechs to Reveal Real Owners, Store Data in Nigeria

• The Central Bank of Nigeria has introduced fresh regulations requiring banks and fintech companies to disclose their ultimate owners and store payment data locally as part of efforts to strengthen transparency and competition.

The Central Bank of Nigeria (CBN) has directed banks, fintech firms, and other financial institutions operating digital payment services to disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders.

According to the apex bank, the measure is aimed at promoting transparency, reducing market concentration risks, and strengthening the resilience of Nigeria’s digital payments ecosystem.

In a circular issued on Monday to Deposit Money Banks (DMBs), Payment Service Providers (PSPs), fintechs, and other financial institutions, the CBN noted that the rapid growth of electronic payments has raised concerns over ownership transparency and market dominance.

The regulator said increasing adoption of digital financial services and the rise of dominant players in key payment activities have also raised concerns about the localisation of critical payment data.

“All Deposit Money Banks, Payment Service Providers, and Other Financial Institutions with digital payment footprints shall disclose the Ultimate Beneficial Ownership (UBO) of significant shareholders in accordance with applicable extant laws and regulations.”

The CBN further directed institutions to maintain accurate and updated ownership records and make them available to the bank whenever requested.

“Institutions shall maintain accurate and up-to-date UBO records and make such information available to the CBN upon request.”

As part of the new framework, all payment transaction data generated within Nigeria must be stored and managed locally in compliance with data protection laws.

The apex bank stated that full compliance with the data localisation requirement will take effect from January 1, 2027.

To prevent excessive market dominance, the CBN also introduced new rules governing card issuing and merchant acquiring activities.

Under the framework, any institution controlling more than 25 per cent of the card-issuing market within a 12-month period will not be allowed to hold more than 15 per cent of the merchant-acquiring market during the same period.

Likewise, institutions with over 25 per cent market share in merchant acquiring will be restricted to a maximum of 15 per cent share in card issuing.

The regulator also directed all affected institutions to submit monthly market-share reports using prescribed templates and timelines.

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“Any licensed financial institution engaged in card-issuing activities… that holds more than 25 per cent market share in card issuing within any rolling 12-month period shall not hold more than 15 per cent market share in merchant-acquiring activities during the same period.”

The CBN said all affected entities must achieve full compliance with the new market structure requirements by December 31.

The apex bank warned that it would monitor compliance and impose sanctions on institutions that fail to comply with the provisions of the circular.