CBN Governor, Yemi Cardoso
Central Bank of Nigeria (CBN) has directed all financial institutions with digital payment operations to disclose the Ultimate Beneficial Ownership of significant shareholders, citing concerns over transparency, market concentration and data localisation.
In a circular issued Monday June 15 to Deposit Money Banks, Payment Service Providers, fintechs and other financial institutions, the apex bank said the rapid growth of electronic payments had raised concerns about market concentration, operational dependence, and the transparency of ownership structures.
The CBN said the increasing adoption of digital financial services and the emergence of dominant players in key payment activities 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 of significant shareholders in accordance with applicable extant laws and regulations, including Anti-Money Laundering, Combating the Financing of Terrorism, and Counter-Proliferation Financing regulations,” the circular stated.
The regulator said affected institutions must maintain accurate and up-to-date UBO records and make such information available to the CBN upon request.
The CBN also mandated all payment participants operating in Nigeria to ensure that payment transaction data generated within the country is stored and managed locally in compliance with data protection laws. Full compliance with the data localisation requirement will take effect on 1 January 2027.
To promote competition and prevent excessive market dominance, the bank introduced new market structure rules for card issuing and merchant acquiring activities. Under the framework, any licensed financial institution that controls more than 25 per cent of the card-issuing market within a rolling 12-month period will not be permitted to hold more than 15 per cent of the merchant-acquiring market during the same period.
Similarly, institutions holding more than 25 per cent market share in merchant-acquiring activities will be restricted to a maximum of 15 per cent market share in card-issuing operations.
The CBN directed all regulated entities to submit monthly market-share returns using prescribed templates and timelines. Affected institutions must achieve full compliance with the market structure requirements by 31 December.
The apex bank warned that it will monitor compliance and may impose supervisory sanctions on institutions that fail to comply, in accordance with applicable laws and guidelines.
