A new order by the Central Bank of Nigeria, CBN, has pegged the daily cumulative transactions of Point of Service Operators, POS, also known as Agent Banking at N1.2 million, while daily withdrawal of an individual customer has also been limited to N100,000.
The order was contained in a new operational guidelines issued by the Yemi cardoso-led CBN released to all financial institutions in the country on Monday, even as industry analysts insist that the order was part of the apex bank’s move to contain fraud associated with agent banking.
The directive also comes two months after Monday Ubani, a Senior Advocate of Nigeria, SAN raised the alarm, to the effect that POS are being used by criminal syndicates, kidnappers, fraudsters, and money launderers to move billions of naira beyond the reach of security agents.
Checks from the Fraud and Forgeries Report for Q1 2024 by the Financial Institutions Training Centre (FITC) indicate that POS fraud cases jumped by 31.12 per cent, rising from 2,683 incidents in Q4 2023 to 3,518 cases in Q1 2024 alone.
What this means, according to experts, is that POS-related frauds accounted for 30.67 per cent of the 11,472 total fraud cases reported last year, making it the biggest contributor to fraud in Nigeria’s financial system.
According to the CBN circular (PSP/DIR/CON/CWO/001/049 signed by the Director of the Payments System Management Department, Musa Jimoh, the CBN aims to strengthen financial stability, promote inclusion, and protect consumers from fraud and other financial crimes.
The circular, addressed to all commercial banks, other financial institutions, OFIs and payment service providers, takes immediate effect, while provisions on agent location and exclusivity will become effective from April next year.
The circular read“The Central Bank of Nigeria, in furtherance of its mandate for the stability of the financial system and pursuant to its role in deepening the financial system, hereby issues the Guidelines for the Operations of Agent Banking in Nigeria.
“The guidelines aim to establish minimum standards for operating agent banking in Nigeria, enhancing agent banking to provide financial services and promoting financial inclusion, encouraging responsible market conduct and improving service quality in Agent Banking operations.
“This circular takes effect from the date of release, while the implementation of agent location and agent exclusivity shall be with effect from April 1, 2026.
“All stakeholders are required to ensure strict compliance with the Guidelines and all other regulations, as the CBN continues to monitor developments and issue guidance as may be appropriate.”
The apex bank also directed that all agent banking transactions must be conducted through a dedicated account or wallet maintained by the principal financial institution to ensure transparency and better oversight.
The CBN warned that using non-designated accounts for agent operations would constitute a regulatory violation and attract sanctions with agents found guilty of misconduct, fraud, or related offences will be held personally liable and may be placed on industry watchlists or have their agreements terminated.
Principals, which are financial institutions, are now required to publish and regularly update the list of all their agents on their official websites and display them within their branches.
Super agents must have at least 50 agents distributed across the six geopolitical zones to ensure wider coverage and access to financial services in underserved areas.
The guidelines also stipulate that no agent can relocate, transfer, or close its banking premises without prior written approval from its principal or super agent.
The CBN also noted that a relocation notice must be displayed prominently at the business premises for at least 30 days to notify customers.
All agent transactions must now be conducted in real time using a secure, interoperable payment infrastructure while financial institutions are mandated to deploy technologies that enable instant settlements and immediate reversals in the event of system failure.
Transaction receipts must include the agent’s name and geographical coordinates, while audit trails and settlement records are to be preserved for at least five years to support regulatory oversight.
Although the new framework pegs the daily cumulative cash-out limit at N1.2 million per agent, the apex bank reserves the right to review the limit in line with the CBN Guide to Charges for Banks and Other Financial Institutions.
“POS agents are restricted to a maximum of N1.2 million per day. Individual customers are limited to N100,000 in daily transactions.
“These limits are intended to curb misuse, enhance financial integrity, and protect consumers within the agent banking framework,” CBN said.
Ubani had in June this year called on the CBN to further tighten the belt on POS operations in the country by enforcing strict licensing, transaction limits, and mandatory linkage of all POS devices and bank accounts to operators’ Bank Verification Numbers, BVN, and National Identification Numbers, NIN.
In a statement titled “The Urgent Need to Regulate POS Transactions in Nigeria’s Financial Ecosystem”, Ubani accused the CBN and other financial regulators of allowing POS operators to fester crimes without blocking the loopholes.
“What we are seeing now is frightening. POS terminals have become the preferred method for criminals to move large sums of money anonymously. Kidnappers now demand ransom via POS, and fraudsters launder stolen funds through agents who collect and disburse without verifying identities,” Ubani said.
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