The Central Bank of Nigeria (CBN) has proposed new rules to separate banks from other financial entities, like financial technology (fintech) companies, under their control, in a bid to make the subsidiaries operate independently.
CBN also plans to restrict the use of customer funds for its subsidiaries.
The apex bank proposed the move in a circular dated June 10 and titled ‘Exposure of the draft guidelines on ring-fencing operations of closely linked entities in the nigerian financial system’.
In the circular, CBN said the proposed framework would establish clear operational and functional boundaries among related entities, while addressing “regulatory arbitrage arising from the commingling of activities across different licence categories”.
According to the financial regulator, the guidelines prescribe requirements covering governance, intra-group transactions, segregation of customer funds and data, operational independence, recovery and resolution planning, as well as consolidated supervision.
“The Guidelines is intended to
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