On 6 October 2025, the Central Bank of Nigeria (“CBN”) released its guidelines for the operations of agent banking in Nigeria (circular PSP/DIR/CON/CWO/001/049), a sweeping reform that consolidates prior regulation and introduces significant new obligations.
The new guidelines aim to address a range of systemic and market problems including fraud and operational risk, lack of transparency and accountability, financial inclusion and service quality and regulatory oversight.
There is no doubting that Agent banking has grown rapidly (especially POS agents), but weak oversight, use of non-designated accounts, and terminal misuse have exposed the system to fraud and financial integrity risks. Multi-bank agents made it difficult for any single institution to monitor risks; agents’ locations were not always formally fixed, making geo-tracking hard; and agent networks (especially super-agents) lacked uniform standards.
It is therefore safe to surmise that the mischief intended to be addressed by the new guideline is the rapid expansion of an under-regulated, multi-faceted agent network, which, while valuable for financial inclusion, posed meaningful operational, fraud, and consumer-protection risks. The new Guidelines seek to re-balance growth with stability, transparency, and control.
By introducing and enforcing dedicated accounts, real-time settlement, geo-fencing, and reporting, the CBN seeks to professionalize the agent banking network, improve consumer protection, and ensure funds move securely. With stricter supervisory measures, reporting, and penalties, the CBN is asserting more direct control over agent operations and closing regulatory loopholes.
Major innovations introduced by the 2025 Guidelines include:
1. Exclusivity (Section 4.2): The new exclusivity requirement is arguably the most disruptive change introduced by the new Guidelines. Its implications on existing arrangements are profound: Contractual renegotiation, economic displacement, risk of non-compliance, competition and market structure, super-Agent network constraints, and regulatory enforcement risks.
Agents must now be tied exclusively to a single Principal (bank, microfinance institution, mobile-money operator, or licensed super-agent) and may belong to only one super-agent network. All agent transactions must flow through a dedicated agent account or wallet managed by the Principal. Use of non-designated accounts is expressly forbidden.
2. Transaction Limits: The guidelines set maximum daily and weekly transaction limits: e.g., cash-in (deposit) per customer is capped at ₦100,000 daily, ₦500,000 weekly; cash-out similarly capped; and a cumulative daily cash-out per agent of ₦1.2 million.
3. Location and Geo-fencing: Agents’ business premises must be mutually agreed with the principal, published, and devices geo-fenced to those locations. Relocations require prior notice (30 days) and public display, and agents cannot move devices without approval.
4. Reporting and Audit Trails: Principals must submit detailed monthly reports (transaction volumes, fraud cases, complaints, active agents, training) to the CBN. Audit trails and settlement records must be retained for at least five years.
5. Sanctions and Personal Liability: The Guidelines introduce explicit fines and sanctions. Agents may be held personally liable for misconduct; principals may terminate agreements, and CBN may blacklist agents or even revoke licences.
6. Training: Principals and super-agents must ensure agents undergo mandatory training on Know Your Customer (“KYC”), Anti-Money Laundering / Countering the Financing of Terrorism (“AML/CFT”), consumer protection, financial literacy, and more, before onboarding and periodically thereafter.
Implications for Existing Agency Agreements
Given these new requirements, banks and financial institutions must review and revise their existing agent-banking contracts. Below are key clauses that should be carefully examined for amendment, supplementation, or deletion:
(i) Exclusivity Clause: Current non-exclusive or multi-principal arrangements – any term in existing contracts that permits an agent to serve multiple principals conflicts must be renegotiated for all agents to transition to a single-bank relationship in line with the new Guideline.
(ii) Super-agent arrangements: Contracts with super-agents must be aligned to ensure a super-agent’s network does not overlap, per the “one super-agent network” rule.
(iii) Agent Account / Wallet Clause: If current contracts permit agent transactions through general or non-designated accounts, those provisions must be replaced and a provision delimiting the use of the dedicated account, specifying the obligation to use designated wallets only, should be inserted. Also, a clause should define the responsibilities if the agent breaches this rule (e.g., personal liability, termination).
(iv) Transaction Limits: Agreements must reflect the new caps (daily, weekly, per-customer, per agent). Parties should build in mechanisms to monitor and enforce these limits. For instance, contracts should mandate real-time reporting of transactions, reconciliation, and settlement.
(v) Location and Premises: Contracts should state the agreed business address, notice procedures for relocation, and the requirement for prior approval. There should also be a clause on geo-fencing and device immobility: agents cannot move terminals without approval, and agreements should require agents to comply with geo-fencing technology. A clause for breach (e.g., unauthorized relocation or device sharing) should include sanctions, possibly termination.
(vi) Data, Record-keeping, and Audit: Contracts should obligate agents to keep audit trails, receipts with necessary details (agent name, geo-coordinates), and settlement documentation for at least five years. Principals should require agents to cooperate with monthly reporting obligations to the CBN, enabling the principal to gather necessary data.
(vii) Training and Compliance: Insert express contractual obligations for agents to undergo CBN-mandated training, at onboarding and periodically. Provide for consequences of non-kcompliance: e.g., suspension, termination, or withholding remuneration.
(viii) Liability, Sanctions, and Dispute Resolution: Revise limitation of liability clauses to reflect potential personal liability of agents and the principal’s right to terminate for breach.Include categories of breach that match the CBN’s enumerated violations (misconduct, use of non-designated accounts, relocation without approval, non-compliance with transaction limits). Clarify dispute resolution mechanisms, including termination, blacklisting, and possible indemnities.
(ix) Termination and Migration: Given that many agents may have multi-principal contracts, principals should include a migration plan clause that provides a roadmap (and possibly compensation or notice) for transitioning agents into an exclusive relationship. Include opt-in / opt-out rights, migration timelines, and termination terms consistent with the CBN’s effective date (1 April 2026) for exclusivity and location rules.
Options & Legal Risks in Migrating Existing Agents
Given the above, banks and financial institutions should weigh the following strategic options, balancing opportunity and risk:
Voluntary Migration Program: Offer agents a “migration package”: preferential terms, bonuses, or profit-sharing to encourage them to convert exclusively. Conduct mapping exercises to identify high-value agents, and negotiate transition agreements before April 1, 2026, the enforcement date. Use clear communications, training, and legal counseling so agents fully understand the new obligations. The risk here is that some agents may reject transition; cost of incentives may be high; potential competitive bidding among principals.
Selective Termination: Principals may decide not to retain some agents and terminate existing multi-principal agents who decline exclusivity. Use termination clauses in existing contracts (with requisite notice) to wind down relationships. One risk factor here would be possible legal claims from agents (if termination is poorly handled), reputational risk, loss of agent network coverage, potential regulatory scrutiny.
Contractual Amendment & Safeguards: Draft and execute formal amendment agreements with agents, updating agents’ contracts in line with the new Guidelines. Include mutual covenants, compliance warranty, indemnities, and performance measures. Strengthen compliance monitoring mechanisms and ensure technological controls (geo-fencing, wallet segregation, reporting) are built in. This is without attendant Legal cost; negotiation friction; risk that some agents may not agree, leaving gaps; must ensure new contracts are enforceable and aligned with regulatory standards.
Waiver or Exemption: A request for waiver or phased implementation is a pragmatic option for principals who may struggle to achieve immediate compliance, particularly where their agent networks include rural, low-volume, or hard-to-reach operators. In these contexts, strict and immediate adherence to the exclusivity, geo-fencing, or infrastructure requirements could unintentionally undermine financial inclusion, disrupt essential last-mile services, or force vulnerable agents out of the ecosystem. By engaging the CBN through structured regulatory dialogue, leveraging industry associations, or proposing phased compliance plans, principals can demonstrate good-faith commitment to the guidelines while seeking flexibility that preserves service continuity and protects end-users. Such an approach aligns with the CBN’s underlying policy objectives: strengthening the agent banking framework without destabilising the very networks that drive financial inclusion in underserved communities.
However, this strategy must be pursued cautiously. The CBN is not obliged to grant exemptions, and selective approvals could create uneven enforcement across the market, exposing some institutions to competitive or compliance disadvantages. Moreover, petitions for waivers, if poorly framed, may be interpreted as attempts to circumvent regulatory intent, creating reputational risks and inviting closer scrutiny. For these reasons, any request must be carefully justified, transparently presented, and supported by verifiable data showing why temporary relaxation is necessary to protect customers, sustain rural access points, and enable an orderly transition to full compliance.
Has the CBN succeeded in addressing the mischief?
The CBN has largely addressed the mischief by preserving the financial-inclusion benefits of agent banking while adding stronger safeguards, such as dedicated settlement accounts, transaction limits, geo-fencing, enhanced reporting, and clearer sanctions to curb fraud and operational abuse. The shift to exclusive agency improves supervision and accountability by eliminating the dilution of responsibility across multiple principals.
However, the transition may create practical tensions. Agents who previously earned more through multi-bank relationships may resist consolidation, while principals now face competitive pressure to secure high-performing agents and bear higher compliance and restructuring costs. There is also a risk of market concentration that could disadvantage smaller institutions or new entrants. Ultimately, the effectiveness of the reforms will depend on how consistently and transparently the CBN enforces the exclusivity and location requirements, and whether it allows any tolerances or exemptions in practice.
Recommendations for the future:
Looking ahead, the CBN could strengthen the effectiveness of the guidelines by adopting a more gradual and supportive approach to compliance such as phased implementation for vulnerable segments and clearer engagement with stakeholders. Industry-wide standardised contract templates would ease the cost and complexity of agent migration, while regulatory sandboxes or pilot schemes could allow innovative or hybrid agent models to be tested without breaching the rules. Regular impact assessments would help the CBN track how exclusivity affects inclusion, competition, and agent livelihoods. Finally, sustained investment in agent training and capacity-building would enhance professionalism, reduce fraud risks, and ensure that the long-term objectives of the framework are achieved.
— Authored by Dr. Sussan Agu (Partner)
CBN Agent Banking Guidelines 2025