E-Financial
Court Backs Banks to Collect Customers’ Social Media Handles
A federal high court in Lagos has struck out a case against the Central Bank of Nigeria (CBN) over its directive requiring banks to collect and verify social media handles as part of their know-your-customer (KYC) requirement.
In June 2023, the apex bank issued the directive, saying the aim is to prevent financial crime, and terrorism, as well as boost the precision and thoroughness of customer identification.
Chris Eke, the applicant and a customer, represented by Olubunmi Abayomi-Olukunle, a lawyer, had filed suit number FHC/L/CS/1281/2023 in July 2023, arguing the CBN’s directive infringed upon constitutional rights, particularly section 37 of the 1999 constitution.
Nnamdi Dimgba, presiding judge, struck out the suit filed by Eke, which sought a declaration that the regulation as contained in section 6(a)(iv) of the CBN (customer due diligence) Regulations, 2023, is “undemocratic, unconstitutional, null and void”.
The CBN, in its response to the suit, filed a notice of preliminary objection, challenging the competence of the suit and disagreeing with the claim of interference with the applicant’s private life.
In his judgment, Dimgba held that the notice of preliminary objection had merit, subsequently striking out the suit.
The judge ruled that providing a social media handle is equivalent to providing email and phone numbers for potential customers, and therefore, it does not violate the right to privacy.
“First, the applicant claims that the requirements on the CBN regulations for financial institutions to request and collect the social media handle of its customers as part of KYC infringes on his right to privacy,” the judge said.
“This claim is very ambitious and amounts to a very far throw. The said regulations are directed to and apply to financial institutions. It does not apply to private individuals such as the applicant.
“Even if, as appears to be argued, that the regulations itself would inevitably affect the applicant, this claim is speculative for the simple reason that in nowhere in the affidavit in support was it stated that the applicant operates an account with a financial institution and that the said institution had demanded his social media handle.”
Consequently, the judge said the suggestion that he would be negatively affected by the regulation is very “speculative and at large”.
He said there is a lack of evidence suggesting financial institutions have implemented the regulation, and it is causing disruptions and inconvenience.
Furthermore, Dimgba said if the applicant is “irritated by the requirement of the regulation”, he has a choice to “refuse to do business with any bank insisting on the information as part of its social media handle, but to seek other alternatives”.
‘PROVISION OF SOCIAL MEDIA HANDLES TO BANKS DO NOT TRANSLATE TO BREACH’
Dimgba said banks asking customers or potential clients to provide their social media handles is not a breach of privacy.
He said the essence of having a social media account was for one to be publicly visible communication-wise.
According to the judge, a social media handle, being in the public space, can be accessed by everyone whether or not consent was obtained.
As a result, he said it would be unreasonable to hold the respondent in breach of privacy.
“The apprehension of the Applicant of his social interactions being monitored is manifestly speculative in itself and rather incredulous to believe that the financial institutions have the luxury of time to concern itself with such frivolities,” the judge said.
E-Financial
SEC Restates Commitment to Transparency in Fintech Regulation
Securities and Exchange Commission (SEC) has assured stakeholders in the fintech space it is committed to ensuring transparency and integrity in the regulation of the space.
Dr. Emomotimi Agama, director general, SEC, said it has provided a level playing field to all applicants.
Agama, stated this during a meeting with Regulatory Incubation and Accelerated Regulatory Incubation Program applicants on Monday.
The SEC DG stated that the commission understands the anxiety and the need to be regulated but added that they have to be very careful even in its desire to be inclusive.
He said, “The process of registration is a very technical process because registration is the hallmark of regulation. It goes beyond onboarding and registering, it requires monitoring, education, and surveillance and all of these are continuous. This journey is a new one that we have not gone through before. As we continue, we will find challenges, which we need to solve because every challenge is solvable.
“I am here to assuage fears being exhibited, we have provided a level playing field but as a government institution we must take things into context while doing this. The groups that were admitted into the ARIP and RI are beginning to see that we have started demanding for some information, operational updates and more regulatory requirements in line with the concept of a Regulation Incubation Programme or a Sandbox as some other institutions call it. In doing this, we are understudying what they are doing and the risk that they pose to investors and to themselves.
“We have not only done that, we have also issued new regulations to the public, which we call an exposure document. If you look at it, it is an upgraded version of our earlier regulations and the regulation making process demands that we get your views as stakeholders before it becomes a regulation.”
Agama stated that the inputs of stakeholders is important as regulators cannot claim to know everything adding that the rules would be amended to include all valid points to make it an all-inclusive document.
He further disclosed that the commission has increased the space to include more regulations to accommodate more individuals, more institutions and more functions because accommodation is the stance of the government regarding the space.
E-Financial
Ecobank Warns against Fraud during Yuletide
Ecobank Nigeria has cautioned customers to be vigilant against fraudsters during the Yuletide while promising uninterrupted access to banking services through its digital platforms throughout the holiday season.
In a statement on Monday, Adeola Ogunyemi, head, Consumer Banking at Ecobank Nigeria, emphasised that customers can continue their shopping and transactions smoothly via the bank’s various digital channels.
Ogunyemi highlighted the Bank’s long-standing commitment to digital transformation, which aims to improve customer experience and provide alternative access to banking services.
Ecobank Nigeria is an affiliate of the Ecobank Group, the leading pan-African banking group.
The bank offers a comprehensive suite of financial services and solutions to consumer, commercial, corporate, and investment banking customers at over 240 branches and 35,000 Xpress Point agencies across Nigeria.
E-Financial
CBN Permits BDC Operators to Buy FX from NAFEM During Festive Season
Central Bank of Nigeria (CBN) has announced that eligible Bureau de Change (BDC) operators will have temporary access to the Nigerian Autonomous Foreign Exchange Market (NAFEM) to purchase $25,000 weekly. This arrangement, aimed at addressing seasonal foreign exchange (FX) demand, will be effective from December 19, 2024, to January 30, 2025.
In a statement signed by T.G. Allu, CBN’s acting director of trade and exchange, the apex bank said BDC operators would buy FX from authorized dealers—banks licensed by the CBN—exclusively to meet retail market demand.
“To meet expected seasonal demand for foreign exchange, the CBN is allowing temporary access for all existing BDCs to the NAFEM for the purchase of FX from Authorized Dealers, subject to a weekly cap of $25,000,” the statement read.
BDC operators must fully fund their accounts before accessing the market at prevailing NAFEM rates, choosing only one authorized dealer for transactions under this arrangement. A maximum price spread of 1% is allowed for retail pricing by BDCs, and all transactions will be reported to the CBN’s Trade and Exchange Department.
The CBN reiterated that personal travel allowance (PTA) and business travel allowance (BTA) remain available through banks for legitimate travel needs. The bank emphasized that all FX transactions must be conducted at market-determined exchange rates.
“The CBN remains committed to a fully functional foreign exchange market and will continue to provide liquidity when necessary to manage price volatility,” the statement added.
Earlier in September, the CBN approved FX sales to eligible BDC operators at a rate of N1,590 per dollar to cater to demand for invisible transactions, reflecting ongoing efforts to stabilize the FX market.
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