INTRODUCTION
The Central Bank of Nigeria (CBN) released the “Guidelines for the Operations of Agent Banking in Nigeria” on October 6, 2025, signalling a decisive shift toward a highly regulated, standardised, and secure financial inclusion ecosystem. This framework replaces fragmented previous rules, establishing minimum operational standards, promoting responsible market conduct, and directly tackling persistent issues of fraud and compliance loopholes. For all stakeholders—Deposit Money Banks (DMBs), Other Financial Institutions (OFIs), and Payment Service Providers (PSPs)—these guidelines represent not just an update but a mandatory restructuring of their entire agent network model.
The issuance of these Guidelines by the Central Bank of Nigeria (CBN) is a major regulatory step intended to deepen the financial system, promote financial inclusion, and establish minimum operational standards. The objective is to enhance the provision of financial services through agents, foster responsible market conduct, and significantly improve the overall service quality.
OVERVIEW AND KEY CONTEXT
The guidelines are comprehensive, applying to all entities engaging in agent banking. While the majority of compliance requirements took immediate effect, and all FIs must immediately review their existing operational frameworks to align with the new standards, they have a six-month transition period to finalize strategy and implementation for agent location rules and exclusivity agreements.
The Guidelines apply broadly to all stakeholders involved in Agent Banking, including Deposit Money Banks (DMBs), Other Financial Institutions (OFIs), and Payment Service Providers (PSPs) and their Agents. Its core objective is to enhance financial inclusion while ensuring stability, high service quality, and strict Anti-Money Laundering (AML)/other financial institutions’ Counter-Financing of Terrorism (CFT) adherence. While the circular is effective immediately (October 6, 2025), two critical operational components – agent location (geo-fencing of POS terminals) and agent exclusivity – have a dedicated compliance deadline that must be implemented by April 1, 2026.
Major Sanctions, Board-Level Liability and Zero Tolerance for Compliance Breaches
The new guidelines introduce significantly harsher and highly specific financial penalties for non-compliance, shifting the burden of responsibility directly onto the Financial Institutions (FIs) and their Board members. Compliance with Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) is paramount.
1. AML/CFT/CPF Non-Compliance – A fine of N2,000,000 from each member of the Board of the FI, plus N10,000,000 from the FI itself.
This is the most critical change. Board members face personal financial penalties for compliance failures, mandating direct Board oversight of AML/CFT processes and agent due diligence.
2. Major Administrative Default – Fines starting at N20,000,000 for the offence, with a severe additional penalty of N500,000 for each day the default continues (e.g., operating without CBN approval for certain activities).
There is zero tolerance for unauthorised operations. The high daily fine acts as a powerful deterrent against prolonging non-compliance, making immediate remediation mandatory.
3. Corporate Identity Change – Fine of not less than N5,000,000, mandatory immediate reversal to the approved name/logo, plus N100,000 for each day the default continues.
FIs must secure CBN approval for any change in name, corporate brand identity, or logo before implementation.
Mandatory Restructuring: Exclusivity, Geo-fencing, and Transaction Caps
The Guidelines clearly define the roles and responsibilities of Principal Institutions (DMBs, OFIs, PSPs) in managing their agent network, particularly in mitigating the risk of fraud and ensuring regulatory compliance across the entire ecosystem. The greatest immediate market impact will come from the provisions taking effect on April 1, 2026. The impending deadline forces all Principals to fundamentally reorganize their operations, shifting away from a multi-provider, highly mobile model to a single-provider, fixed-location structure.
1. The Exclusivity Rule: End of Multi-Platform Agents
All Agents (including POS operators) must affiliate exclusively with only one Principal Institution (or one Super-Agent network).
FIs are now in a high-stakes competition to lock in the best agents or for agent loyalty. Contracts must be rewritten to enforce exclusivity and specify dedicated Agent Accounts/Wallets, as transactions outside these dedicated accounts are now a major violation. FIs must offer superior value, liquidity, and support to retain the best agents.
Multi-tenancy (agents working for multiple banks/FinTechs) ends. While aiming to simplify traceability and accountability, and curbing fraud facilitated by system hopping it may reduce agent income derived from switching between providers for the best service/liquidity.
2. Geo-fencing and Location Mandate: Mobility is Restricted
All devices deployed for agent banking (especially POS terminals) must be geo-fenced or geo-tagged to operate strictly within the agent’s single, registered, and approved physical business location. Relocation requires prior written principal approval and 30 days’ customer notice.
This is a firm ban on roaming POS agents. Principals must rapidly deploy and integrate advanced geolocation and real-time monitoring technology into their terminal fleets. This mandate reinforces real-time tracking and control, eliminating the high-risk practice of roaming POS agents and mobile terminals.
The agent business is now anchored to a fixed physical address or location, greatly enhancing security and simplifying fraud tracing or investigation. This increases stability but eliminates flexibility.
3. Transaction Limits, Dedicated Accounts, and Accountability
The guidelines formalise maximum transactional thresholds. The customer daily limit (cash-in/cash-out) is N100,000; the agent’s daily cumulative cash-out limit is N1.2 million.
The daily cumulative agent limit imposes a direct liquidity management burden, requiring real-time monitoring systems for principals.
Dedicated Accounts: All agent transactions must be processed through a dedicated Agent Account or Wallet assigned by the Principal.
Fraud Accountability: Principal FIs are strictly mandated to suspend an agent immediately upon knowledge of a fraud investigation, blacklist the agent if convicted, and provide full support to law enforcement in the investigation and prosecution. The fraud mandate makes the FI a direct partner with law enforcement, cementing the principal’s accountability for network integrity.
Immediate suspension for agents is now a mandatory regulatory action, not a discretionary business decision, ensuring a swift reaction to fraud allegations. agents
CONCLUSION
These guidelines mark the maturation of the Nigerian agent banking sector. For financial institutions, the takeaway is a shift from purely commercial expansion to regulated compliance: invest in technology (geo-fencing, real-time monitoring), reboard-level structure agent contracts for exclusivity, and ensure board-level accountability for AML/CFT compliance immediately. For agents, the message is clear: professionalism and strict adherence to location and exclusivity rules are non-negotiable for continued operation. The CBN has created a framework where enhanced financial inclusion must coexist with robust security and absolute regulatory discipline.
