Nigeria: CBN Facilitates Refunds of ₦7.05 Billion and $714,569 to Bank Customers in Eight Months

The Central Bank of Nigeria (CBN) has facilitated the refund of ₦7.05 billion and $714,569.03 to bank customers within eight months, resolving disputes against financial service providers. This recovery highlights the apex bank’s commitment to addressing unethical banking practices and protecting consumer rights.

The refunds were part of a broader effort to address unauthorized and fraudulent deductions by commercial banks, an issue that has sparked growing concern among Nigerians. Reports suggest that some banks have withheld or illegally deducted funds from customers’ accounts under controversial circumstances, undermining banking ethics.

In response to these challenges, the House of Representatives introduced a bill in October 2024 to amend the Banking and Other Financial Institutions Act 2020. The proposed amendment seeks to combat fraudulent deductions and strengthen consumer protection in the financial sector.

A CBN report revealed that over 20,000 customer complaints were received in 2024, following the failure of some commercial banks to resolve disputed transactions. Of these, 19,988 complaints were lodged within the first eight months of the year, and 15,306 cases—approximately 76.58%—were resolved during this period.

To enhance consumer protection, the CBN initiated a comprehensive review of its regulations in February 2024, aiming to improve standards and address emerging risks associated with financial technology (Fintech). The bank stated in its 2024 factsheet:
“Refunds facilitated totaling approximately ₦7.05 billion and $714,569.03 underscore our commitment to ensuring fair treatment for customers disputing financial service providers.”

Although the names of the banks involved were not disclosed, the CBN has reinforced its stance on regulatory compliance by implementing stringent sanctions to deter unethical behavior and enhance transparency. In 2024, the bank also piloted a consumer protection risk-based examination to proactively identify policy gaps and improve the conduct of financial institutions.

“This risk-based approach complements traditional compliance checks by identifying urgent risks that could impact financial consumer protection,” the apex bank stated.

The CBN highlighted its achievements for 2024, including enhanced customer service standards and increased engagement with formal financial institutions. The central bank also issued approvals for new licenses and transitions within the banking sector:

• Licenses were granted to 16 new microfinance banks and re-licensing of 53 previously revoked microfinance banks.
• Five new approvals were issued for finance companies.
• Two approvals-in-principle (AIPs) for regional commercial banking licenses and one for regional non-interest banking.
• Approval of a non-operating financial holding company and the transition of a merchant bank to a national commercial bank.

To bolster cybersecurity in the financial sector, the CBN adopted ISO 27001 standards and introduced a risk-based cybersecurity framework. Additionally, the bank conducted cyber and technology assessments to improve operational resilience and efficiency.

The CBN’s proactive measures reflect its ongoing commitment to protecting consumers, ensuring ethical conduct among financial institutions, and enhancing Nigeria’s banking sector’s overall stability.