October 07, (THEWILL) — The Central Bank of Nigeria has imposed a ₦5m fine on operators involved in illegal agent-banking activities, in what analysts describe as part of efforts to sanitise the country’s fast-growing but loosely regulated point-of-sale (POS) sector.
Under the revised Guidelines for Agent Banking and Agent Banking Relationships in Nigeria, the apex bank warned that any financial institution, mobile money operator, or super-agent found facilitating unlicensed agent operations would face penalties and regulatory sanctions.
Booming but risky network
Agent banking has become one of the backbones of Nigeria’s cashless drive, processing trillions of naira in transactions monthly, particularly in rural areas with limited bank branches. The network has expanded rapidly since 2019, with over two million POS agents currently operating nationwide.
However, that growth has been accompanied by rising cases of fraud, unapproved lending, and the conversion of agent points into informal cash-distribution hubs. The new ₦5m fine signals the regulator’s intention to strengthen oversight and enforce accountability within the system.
The new rule
The CBN’s directive bars agents from offering services outside their approved scope, such as foreign exchange sales, cryptocurrency transactions, investment schemes, or account openings on behalf of banks.
Super-agents and financial institutions are now required to maintain verified databases of sub-agents and ensure compliance through regular audits and transaction monitoring.
Failure to detect or curb unlicensed operations could attract the ₦5m penalty or even licence suspension for repeated breaches.
The framework introduces a more structured, risk-based oversight model, with new mandates for geo-tracking, daily transaction limits, and Know-Your-Customer verification at every agent outlet. The measures aim to curb fraud while keeping the system credible enough to support the CBN’s financial inclusion goals.
Industry impact
Analysts believe the new regulation could trigger consolidation in the agent-banking space, as smaller operators may merge with larger networks or exit the market entirely.
While the stricter regime may initially constrain liquidity for rural cash users, it could help restore confidence in POS transactions, which have faced rising fraud complaints over the past two years.
Long-term outlook
Though the ₦5m fine may appear punitive, experts say it reflects the CBN’s resolve to realign the agent-banking model with its long-term inclusion agenda — ensuring that growth in transaction volumes is matched by trust, transparency, and traceability.
If fully enforced, the new policy could transform Nigeria’s agent-banking ecosystem from a loosely regulated cash network into a mature, technology-driven extension of the formal financial system.
Ogochukwu Onwaeze
