Why Senate Rejected Proposal for New Fintech Regulator

Nigeria’s Senate has rejected a proposal to establish a separate regulatory body for the country’s rapidly expanding fintech sector, opting instead to strengthen the supervisory powers of the Central Bank of Nigeria over digital financial services.

The decision emerged during a public hearing on proposed amendments to the Banks and Other Financial Institutions Act 2020 (BOFIA), where lawmakers reviewed regulatory frameworks governing financial institutions and emerging digital finance platforms.

Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Mukhail Adetokunbo Abiru, explained that creating a new fintech regulator would duplicate existing functions and introduce unnecessary bureaucracy into Nigeria’s financial system.

According to Abiru, fintech operations intersect directly with core central banking responsibilities including payment system oversight, anti-money laundering compliance, financial stability monitoring, and monetary policy implementation, areas already handled by the apex bank.

Rather than creating another agency, the Senate recommended strengthening the CBN’s mandate to identify and supervise systemically important fintech companies and digital financial service providers, particularly those handling large transaction volumes or sensitive consumer data.

Lawmakers also proposed the creation of a national registry for major fintech institutions, alongside stronger transparency requirements around ownership structures and enhanced risk-based regulatory oversight.

The move comes as Nigeria’s digital financial ecosystem continues to expand rapidly, driven by fintech startups offering payments, lending, digital banking, and financial inclusion services.

However, the Senate also raised concerns about rising digital financial fraud and the proliferation of unregulated investment platforms targeting Nigerians online.

Lawmakers noted that stronger regulatory coordination will be critical to protecting consumers, safeguarding financial stability, and sustaining trust in Nigeria’s fintech ecosystem.

Industry observers say the decision reinforces the central role of the CBN in shaping Nigeria’s digital finance landscape while ensuring regulatory coherence as innovation accelerates across the sector.

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