Regulatory Framework For Agent Banking In Nigeria; CBN Guidelines And Compliance Requirements

INTRODUCTION

In recent times, there has been a rise in the number of Point of Sale (POS) operators commonly known as agents in Nigeria. This is due to the pivotal role they play in improving access to financial services. However, this growth comes with numerous challenges such as fraud, money-laundering, unauthorised terminal movement, and weak agent oversight. Thus, various regulatory frameworks have been issued by the Central Bank of Nigeria (CBN) and other relevant authorities to guide the conduct of POS agents and to ensure strict adherence to the rules in order to successfully run their businesses. In a bid to further strengthen reforms, promote stability in the financial system and create an enabling environment for offering safe financial services to the underbanked and remote areas in the country, on the 6^th day of October 2025, the CBN introduced new guidelines for the operations of agent banking in Nigeria. This article provides a critical analysis of the innovations of the policy and its implications for POS operators and the banking sector.

AN OVERVIEW OF THE GUIDELINES FOR THE OPERATION OF AGENT BANKING IN NIGERIA

The Guidelines for the Operations of Agent banking in Nigeria was issued with the major purpose of establishing minimum standards for operating agent banking in Nigeria. It further aims at enhancing agent banking to provide financial services and promoting financial inclusion, encouraging responsible market conduct and improving service quality in agent banking operations.¹ This Guideline seeks to consolidate and replace all previous laws on agent banking as well as agent banking relationships. The deadline for the implementation of the new provisions is the 1^st day of April 2026.

Below are the salient features introduced by the Guidelines:

1. TRANSACTION LIMITS AND CASH THRESHOLD

One of the key innovations of the new Guidelines is the imposition of a range of transaction limits. The CBN introduced a daily cumulative cash out limit of N1.2 Million (One Million, Two Hundred Thousand Naira) per POS agent. Furthermore, the limit for individual customer daily cash-out(withdrawal) is pegged at N100,000 (One Hundred Thousand Naira) daily and N500,000 (Five Hundred Thousand Naira) weekly per customer. The same applies to cash-in (deposit) and bill payments which are restricted to N100,000 (One Hundred Thousand Naira) daily and N500,000 (Five Hundred Thousand Naira) weekly. According to the CBN, they may vary or amend the transaction limits specified from time to time for each service in line with the extant CBN Guide to Charges for Banks and Other Financial Institutions in Nigeria.²

2. EXCLUSIVITY OF AGENT

Another major reform to the agent banking framework is that the Guidelines mandates all Point-of-Sale (POS) operators to partner exclusively with a single financial institution. This envisages that every agent must now operate under one principal which could either be a commercial bank, mobile money operator, microfinance bank, or any other category of financial institution authorised by the CBN. Also, agents can only belong to the network of one super agent at any given time. This move effectively ends the previous practice of agents working across multiple platforms, where they could simultaneously serve customers through different financial institutions.³

The CBN seeks to explore this means as a tool to enhance regulatory oversight, encourage ethical market practices, and elevate service standards within Nigeria's rapidly expanding agent network.

3. GEO-FENCING AND RELOCATION

To further strengthen monitoring, the Guidelines provide that all POS terminals or agent devices must be geo-fenced to operate strictly within the registered or approved locations. Payment Terminal Service Aggregators (PTSAs) are responsible for facilitating this geo-fencing.⁴ Devices operating outside the approved area are prohibited and attract sanctions ranging from a fine of not less N5,000,000 and N300,000 for each day that the default persists.⁵

4. DEDICATED AGENT ACCOUNT

The Guidelines require that all agent-banking transactions must be conducted through a dedicated account or wallet maintained by the Principal such as the bank, mobile money operator or other financial institutions for the purpose of enhanced visibility.

The use of non-designated accounts is highly prohibited and deemed as a violation of the Guidelines. Thus, any agent who breaches the provision by carrying out transactions outside the designated account shall be personally liable for any misconduct, fraud or other related offences arising from such authorised activity. It could also result in the termination of the agent banking agreement by the Principal or such an agent may be blacklisted or placed on a watchlist by the CBN.⁶

5. IDENTIFICATION AND DUE DILIGENCE

The Guidelines introduce stringent standards for Principals to verify agents through a process referred to as Know Your Agent (KYA). Prospective Individual agents and designated employees on non-individual agents are mandated to provide comprehensive personal identification details like their names and particulars, certificate of incorporation or business name registration, physical address, evidence of availability of funds to cover agent operations, Bank Verification Number (BVN) and National Identity Number (NIN) for individual Agents, as well as for the designated employees of non-individual Agents. In addition, non-individual Agents must submit their Tax Identification Number (TIN) and a valid three-year Tax Clearance Certificate.⁷

As part of the KYA registration process, an appraisal is carried out on the background and professional suitability of the agent, credit history, evidence of criminal records etc. In addition, stronger transaction surveillance and biometric identifiers are put into consideration.⁸ Thus, Principals must capture and maintain detailed agent information such as biometric data and GPS location within the Agent network database.⁹

6. ELIGIBILITY CONDITION

Another major feature of the Guidelines is the provision for eligibility of agents. Certain people are disqualified from becoming agents. They include the following:

• A person or entity with a non-performing loan with any financial institution within the 12 months preceding the appointment or renewal of such agent banking a
• An individual that has been declared bankrupt or is an undischarged bankrupt, and in the case of a non-individual, a company that has filed for insolvency;
• A person who has been convicted of a felony; fraud, dishonesty and related offences.
• A person whose BVN has been watch-listed.
• A person who has been blacklisted.
• An individual whose appointment as an Agent contravenes any law in Nigeria.¹⁰

Such persons listed above are ineligible from being appointed or reappointed as an agent.

7. PUBLICATION AND LOCATION

To promote transparency within the agent banking framework, Principals are required to publish accurate information regarding their network of Agents. Each Principal must ensure that an updated list of all its Agents is made available on its official website. Furthermore, each branch of the Principal is obligated to display a list of the Agents operating within its locality.

In addition, every super-agent is mandated to maintain a minimum of fifty (50) Agents, strategically distributed across the various geo-political zones of the country. This requirement ensures a balanced and equitable spread of agent banking services, promoting financial inclusion and accessibility across different regions.¹¹

With respect to the relocation or closure of Agent premises, strict guidelines are in place to maintain operational stability and regulatory compliance. No agent is permitted to relocate, transfer, or close its banking premises without first submitting a prior notice to the Principal in writing. This notification must be provided at least thirty (30) days in advance, or within such other period as may be mutually agreed upon in the Agent Banking Agreement.¹²

8. REAL TIME TRANSACTIONS

The Guidelines stipulate that in order to ensure the seamless facilitation of real-time transactions conducted by Agents, the Principal must adopt effective technological measures. Specifically, the Principal is required to deploy technology that enables real-time transaction processing and guarantees instant payments into the accounts of end users. This requirement is aimed at enhancing the speed and efficiency of financial services provided through the Agent banking system.

In addition, the Guidelines emphasise that all transactions carried out within Agent banking operations must be processed in real-time. This provision ensures that customers receive immediate value for their transactions. Furthermore, the Principal is obligated to provide its Agents with accurate and timely settlement positions to enable proper reconciliation of transactions.¹³ This measure allows Agents to verify transaction records, address discrepancies promptly, and maintain transparency in their financial dealings.

CONCLUSION

With the introduction of various innovative provisions in the Guidelines, the aim of enhancing financial inclusion and improving the quality of the financial system in Nigeria is attainable.

For POS agents, some of the rules may be challenging, because most of them operate under multiple principals and as such the restriction to a single principal may affect their business negatively. Further, by virtue of the new transaction limits, POS operators will face tighter constraints on cash-out and cash-in transactions through their devices and might have to resort to other streams of revenue generation.

In addition, the law imposes a higher operational and compliance burden on POS agents and meeting the technological demands may incur more cost. Nonetheless, the CBN Guidelines for the operation of agent banking is a step in the right direction as it will ensure safer and reliable access to banking services through agents.

Footnotes

1. CBN Guidelines for the Operation of Agent Banking in Nigeria. Available at https://www.cbn.gov.ng/Out/2025/CCD/CIRCULAR%20AND%20GUIDELINES%20FOR%20THE%20OPERATIONS%20OF%20AGENT%20BANKING%20IN%20NIGERIA%20OCTOBER%206%202025.pdf Accessed (27/10/2025).

2. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025), Para 11 .

3. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025), Para 4.2.

4. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025),Para 9.4(ii) .

5. CBN Guidelines for the Operation of Agent Banking in Nigeria(2025),Appendix 1 No. 13. .

6. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025), Para 10.1.

7. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025), Para 8.1.

8. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025),Para 8.2.

9. CBN Guidelines for the Operation of Agent Banking in Nigeria(2025),Para.

10. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025), Para 7.2.

11. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025), Para 10.2.

12. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025), Para 10.3.

13. CBN Guidelines for the Operation of Agent Banking in Nigeria (2025), Para 10.4.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.