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Introduction
Agent banking has emerged as one of the most significant innovations in Nigeria's financial sector, designed for financial inclusion and access. This has led to a more integrated and inclusive banking ecosystem that extends banking services to underserved and unserved communities. With over 2 million agent networks deployed nationwide, financial services are now accessible to underserved communities, boosting digital adoption and significantly extending access beyond traditional bank branches.1
In light of the rapid advancement of the agent banking sector, on October 6 2025, the Central Bank of Nigeria (the "CBN") issued the Guidelines on the Operations of Agent Banking, 2025 (the "Guidelines"). The Guidelines were issued to enhance Nigeria's agent banking sector by introducing stricter regulatory requirements, consumer protection standards, and stricter administrative penalties for players within the industry in order to encourage responsible market conduct and improve service quality in agent banking operations. These introductions, while designed to safeguard customers, raise concerns.
This article (a) examines the implications of the Guidelines for Nigeria's banking system while highlighting the key innovations that the Guidelines introduce; (b) compares the Guidelines to the previous regulatory framework for agent banking; (c) provides our thoughts on the practicability of certain provisions of the Guidelines; and (d) makes recommendations on the way forward. Overall, the Guidelines are on track to improve Nigeria's fast-growing agent banking regime. However, it will remain to be seen how provisions like the geo-tagging of agents to specific locations will be implemented and enforced.
Agent Banking in Nigeria
Agent banking entails the provision of financial services by a third party, referred to as an agent, to customers on behalf of a licensed deposit-taking financial institution, referred to as a principal.2 It is a banking model involving a business, bank or financial institution delivering permitted financial services outside its traditional place of business through agents to customers.3 The point of sale ("PoS") agents, kiosk bankers, and mobile money operators have become the lifeline of financial transactions for millions. These tools have transformed the everyday life of Nigerians, weaving financial services into the fabric of Nigeria's informal economy.
The Previous Regulatory Regime for Agent Banking
The Guidelines were issued to establish a legal framework that meets the present realities in Nigeria relating to agent banking. The previous regulatory regime for agent banking included separate regulatory frameworks that governed agents and super-agents. These included the (a) Guidelines for the Regulation of Agent Banking and Agent Banking Relationships, 2013 (the "Previous Guidelines")4; and (b) Regulatory Framework for Licensing Super Agents (the "Super Agents Framework") (together the "Previous Agent Banking Framework").
The relationships that exist under the Guidelines could include (a) principal and an agent; or (b) super agent recruiting, aggregating and managing agents on behalf of a principal.5 The Guidelines is applicable to deposit money banks, other financial institutions, payment service providers, super-agents and licensed agents operating within Nigeria's agent banking ecosystem.6 However, the Guidelines consolidate these extant regulations with respect to agent banking, super-agents, principal and agent banking relationships. The Guidelines are effective from the release date, except for the provisions relating to location and exclusivity, which will take effect on April 1, 2026.
Highlights of Key Changes Introduced
1. Narrowing the Scope of Permissible Activities and Non-Permissible Activities:
The Previous Guidelines and the Guidelines both outline the activities that agents are permitted to undertake and prohibited from performing.7 Certain activities that agents were previously permitted to undertake under the Previous Agent Banking Framework have now been expressly prohibited. These include (a) payment of salaries; (b) cash disbursement of loans or cash repayment of loans; and (c) cash payment of retirement benefits.8 While activities such as a. an agent being run or managed by a financial institution's employee or associate; or b. charging customer agent fees, which were prohibited under the Previous Guidelines 9 have no equivalent provision under the Guidelines.
The Guidelines also prohibit super agents from conducting agent banking activities10 and the use of non human or automated machines by agents.11 The prohibition of non-human channels essentially preserves the human-interface element essential for customer verification and trust in financial inclusion channels. As with the Previous Agent Banking Framework, financial institutions remain responsible for conducting risk assessments to determine the services a particular agent may provide, and the CBN retains the authority to prescribe additional permissible and non-permissible activities.12
2. Introduction of Transaction Limits
Under the Former Guidelines, a principal has the discretion to impose transaction ceilings while considering the volume of the cash moved by the agent and the locality of the agent.13 However, under the Guidelines, uniform transaction limits have been introduced for all agents regardless of the volume of cash that the agent has been moving or the locality of agents. Notwithstanding, financial institutions are to ensure that the transactional limits for agent banking are compliant with the maximum regulatory limits stipulated by the Guidelines. A customer's financial institution is mandated to limit cash-in (deposits), cash-out (withdrawals) and bill payments.14
This change ensures consistency of operations among agents as all agents have the same transaction limits. It also restricts the events of higher risks where customers rely on select agents for larger agent banking transactions, thereby enhancing liquidity management. Furthermore, principals must ensure that the daily cumulative withdrawal limit of their agents does not exceed N1,200,000 (One Million, Two Hundred Thousand Naira).15 The CBN also reserves the right to review and adjust these limits periodically.16
3. Stricter Interpretation of Agents' Physical Premises
Under the Previous Guidelines, 'premises' was defined as 'the physical location or place used by the agent to conduct business'.17 This could be loosely interpreted as operating from any physical location where customers could engage with the agent. However, the Guidelines impose stricter interpretation by defining an agreed location as "... a place where an agent operates its business acceptable by the principal, with a physical structure of not lower than a kiosk at a properly identifiable location."18 Hence, roaming agents or temporary stands set up by agents in defined locations are no longer permissible. The Guidelines further mandate that any device deployed to an agent or utilised by an agent in carrying on agent banking services must be geo-fenced or technologically tagged to operate within the agreed location.19
Hence, CBN has mandated virtual geographic boundaries for agent banking devices, as agents will consequently be prohibited from operating outside the agreed-upon locations. The implication is that agent roaming will not be possible, as agents will now be restricted to the areas expressly geotagged in their devices.20 The provision on geotagging will take effect in April 2026, and it remains to be seen how the PoS agents will implement this provision and the extent to which this requirement will be enforced.
4. Exclusivity Provisions
The Previous Guidelines expressly prohibited exclusivity clauses in agent banking contracts between f inancial institutions and agents.21 Hence, agents were at liberty to provide agent banking services to multiple financial institutions and could serve competing principals to the extent that such additional f inancial institutions could be accommodated. However, this regime made it difficult for CBN and the principals to reliably track agents' activities. However, under the Guidelines, agents are only permitted to undertake agent banking services for one (1) principal for a specified period.22 Although this may reduce competition in providing agent banking services, it would provide ease of tracing agent misconduct and liability and reduce incidents of fraud. Hence, principals and super agents are required to amend existing contracts that permit multi-affiliation or that are silent on this requirement. Such contracts should be amended to reflect exclusive relationships before April 1, 2026.
5. Enhanced Consumer Protection Practices
Under the Previous Guidelines, consumer protection was limited to basic disclosure and signage requirements, and customer complaints were to be resolved within fourteen (14) days.23 The Guidelines now mandate a principal to establish mandatory complaint channels, maintain facilities for recording all customer complaints and documenting their resolution, provide customer education on transaction safety precautions and implement effective dispute resolution mechanisms.24 In addition, customer complaints are to be resolved within a reasonable time, in any event no later than seven (7) days.25
6. Introduction of Payment Terminal Service Aggregators (PTSAs) as Stakeholders in the Agent Banking
The Guidelines introduce PTSAs as new stakeholders into the agent banking regime. Principals are imposed with the responsibility of ensuring that each agent terminals are connected to at least one PTSA.26 The responsibilities of a PTSA deployed for the purpose of agent banking services include: (a) registration of the PoS to be deployed to an agent on its platform; (b) facilitation of geo-fencing or geo location of the PoS terminals to be deployed to Agents; (c) ensuring unique identification of agents and/or their terminals by integrating the Terminal Management System with CBN Automated Regulatory Data Solutions (CARDS); (d) submitting monthly report of transactions to the CBN in line with extant requirements on connectivity to PTSAs; and (e) providing monthly returns on the number of PoS/super agents registered and operating within their geo-location.27
This introduction is targeted at improving CBN's oversight on agents by ensuring that agents' devices are properly monitored and form part of a centralised traceable network. This, in our opinion, will reduce incidents where PoS terminals are indiscriminately used to facilitate fraudulent activities and will limit the unauthorised use of PoS terminals. Furthermore, customer protection will be enhanced as disputes and transaction reversals can be traced to terminals operating in specific locations the PoS terminals have been geotagged to.
7. Introduction of Dedicated Agent Accounts
The Guidelines provide that all agent banking transactions are expected to be conducted through a dedicated account or wallet maintained by the principal deposit bank to ensure enhanced visibility. The use of non-designated accounts is highly prohibited and considered a violation of the Guidelines. Thus, any agent who breaches the provision by carrying out transactions outside the designated account will be personally liable for any misconduct, fraud or other related offences arising from such authorized activity. Using non-designated accounts is also considered a ground for termination of the agent banking agreement and blacklisting or watch-listing of such an Agent.28
8. Introduction of Eligibility Condition for Agents
Under the Guidelines, an agent may either be an individual or a non-individual.29 To qualify for a licence, a non-individual agent must be an incorporated entity engaged in legitimate commercial activities such as the sale of confectionery and fast-moving consumer goods, petrol stations, restaurants/bars, parks and recreation centres, fashion and beauty outlets with a duly registered place of business.30 Under the Guidelines, certain persons and entities are expressly disqualified from becoming agents. These include: (a) any person or entity with a non-performing loan with any financial institution within the twelve (12) months preceding the appointment or renewal of such agent banking agreement; (b) an individual that has been declared bankrupt or remains undischarged, and in the case of a non-individual, a company that has filed for insolvency; (c) a person who has been convicted of a felony, fraud, dishonest, or related offences; (d) a person whose bank verification number ("BVN") has been watch-listed; (e) a person who has been blacklisted; and (f) any individual whose appointment as an agent contravenes any law in Nigeria.31 Notably, the requirement for an entity to have been in legitimate commercial activity for at least twelve (12) months immediately preceding the date of the application to become an agent is no longer applicable.32
9. Expanded Provisions on Sanctions for Offences
Under the Previous Guidelines, sanctions were limited to suspension or termination of agent authorization.33 However, the Guidelines introduce administrative penalties for specific defaulting events, in addition to the suspension or revocation of an agent's authorisation. Compliance failures within an institution's agent network now attract monetary fines and may also carry personal consequences, including but not limited to the blacklisting of entities, their board, management and officers.34 This enhanced sanction regime strengthens compliance obligations and accountability of agents and principals.
Practical Implications of the Guidelines
The Guidelines represent a major step by the CBN to formalize and regulate the fast-growing agent banking sector. On paper, the rules are comprehensive. They define permissible and non-permissible activities, set transaction limits, mandate detailed contracts, impose stringent compliance obligations, strengthen consumer protection, and introduce revised sanctions. In practice, however, the implications of these provisions are far more complex.
First, agent banking in Nigeria is not dominated by large corporations but by micro-entrepreneurs, including the PoS agents under umbrellas, kiosk bankers in markets, and digital payment operators who serve everyday Nigerians. For many of these agents, the Guidelines signify more rigorous training, higher compliance costs, stricter monitoring, and infrastructure requirements that may be financially burdensome. While kiosks with branding, signage, and secure structures may be feasible in urban centres in Abuja or Lagos, in rural communities where agents often operate from tables or small makeshift shops, such requirements risk excluding the very people the agent banking system was designed to empower and provide financial inclusion to.
Second, a major inclusion in the Guidelines is the introduction of exclusivity in agent contracts. In our view, this development may threaten financial inclusion by restricting agents to a single principal, thereby limiting customer choice and disincentivizing agents by reducing their earning potential, which was formerly diversified across multiple principals. While the Guidelines' intendment to enhance transparency and reduce incidences of fraud is laudable, this exclusivity may foster monopolistic tendencies where a single principal dominates an area, further constraining competition and access. In our view, the CBN should rather restrict the number of principals to a maximum of two (2) or three (3) rather than mandating sole exclusivity of an agent to a principal.
Third, a challenge lies in how adaptable the Guidelines are to the Nigerian agent banking regime. A legal framework should meet socio-economic realities, so that regulations do not become a barrier to f inancial inclusion, especially in the digital financial ecosystem. While the Guidelines aim to protect consumers, formalise operations, and align Nigeria with global best practice, rigid enforcement in the presence of socio-economic realities such as poverty, large informal sector, and limited infrastructure risks undermining the goal of agent banking, which is increasing financial inclusion.
Conclusion
Clearly, the introduction of the Guidelines is a step in the right direction, reflecting the CBN's focus on oversight and risk management in Nigeria's evolving agent banking system. However, in view of Nigeria's present realities, the stricter infrastructure, operational and compliance requirements may exclude informal agents who lack the capacity to formalise setup requirements mandated under the Guidelines. Nigeria's agent banking regulations must evolve to reflect the realities of micro-entrepreneurs and rural operators to foster inclusion. It is hoped that the CBN will introduce further amendments that will address these issues.
Footnotes
1 Central Bank of Nigeria "CBN Update" October 2025, (https://www.cbn.gov.ng/Out/2025/CCD/CBN%20UPDATE%20OCTOBER%202025%20EDITION.pdf) accessed on February 9, 2026.
2 The Guidelines, para 1.0.
3 Ogah D. et al, "Agent Banking: Penetrating Markets, Rural Communities for Financial Inclusion" (https://guardian.ng/business-services/agent-banking-penetrating-markets-rural-communities-for-financial-inclusion/) accessed February 19, 2026.
4 Central Bank of Nigeria "Guidelines for the Regulation of Agent Banking and Agent Banking Relations in Nigeria" (https://www.cbn.gov.ng/Out/2012/CCD/CBN%20Exposure%20Draft%20Guidelines%20for%20the%20Establishment%20of%20Agent%20Banking %202012.pdf?__cf_chl_tk=.oXIuBwomDYB3lbankegmfZQWPhRhBDulHD0C87jVrA-1772020848-1.0.1.1 zQbwW2yKfNNMvo2vvukYEnTfgmx_A6LI3w1QbtYhtAs) (Accessed February 25, 2026)
5 Para. 2.2, 2.3 and 2.4.
6 Guidelines, para. 2.1.
7 Previous Guidelines, para.6.2 and 6.3; the Guidelines para. 3.0
8 Previous Guidelines, para.6.2 (iii), (vii), and (ix).
9 Previous Guidelines, para. 6.3(iii), (xii).
10 Guidelines, para.3.2 (i).
11Guidelines, para. 3.2 (iv).
12 Guidelines, para. 3.1 (ix); 3.2 (v) and 3.3.
13 Para. 6.4.
14 The Guidelines provide that (a) cash-in (deposits) are subject to a daily limit of ?100,000 and a weekly limit of ?500,000; (b) cash-out (withdrawals) are subject to a daily limit of N100,000 and a weekly limit of N500,000; and (c) bill payments are subject to a daily and weekly limit of ?100,000. See para. 11. 0 of the Guidelines.
15 Guidelines, para. 11.0(iii).
16 Guidelines, para. 11.0(iv).
17 Previous Guidelines, para. 1.
18 Para. 16.0.
19 Para. 11.0(v).
20 This provision bears a great import on the Nigerian agent banking regime as agents are well known to move across areas and can be found virtually everywhere, in places like car parks, garages, marketplaces, religious centres, and multiple areas. Since geotagging will prevent the devices from operating outside specific areas, the implication on the profitability of agents may raise concerns.
21 Para. 7.
22 Guidelines, paras. 4.2 and 16.0.
23 Para. 15.1(vi).
24 Para. 10.9.
25 Para. 15.1(vi).
26 Guidelines, para.9.1.2(xxvii).
27 Guidelines, para. 9.4.
28 Para. 10.0.
29 Para. 6.1.
30 Para. 6.2.
31 Para. 7.2.
32 Previous Guidelines, para.4.1(i).
33 Previous Guidelines, para. 22; Super-Agent Guidelines, para. 2.0.
34 Para.14.3
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