The Central Bank of Nigeria (CBN) has introduced a new framework to combat rising banking fraud, requiring customers to report fraudulent transactions within 72 hours, while banks and fintechs must investigate and refund verified cases within 16 working days.
As per TechCabal, the move follows a sharp rise in fraud, with Financial Institutions Training Centre (FITC) data showing losses surged 603% to ₦3.29 billion ($2.27 million) in Q1 2025 across 12,347 reported cases, a 7.63% increase year-on-year.
Draft guidelines dated November 26, 2025, target Authorised Push Payment (APP) fraud and aim to strengthen prevention, accountability, and faster victim reimbursement.
“When finalised, the Guidelines would mandate all financial institutions to institute preventive measures as well as modalities for mitigating and managing APP fraud,” said Rita Sike, director of the Financial Policy and Regulation Department.
The new rules build on earlier efforts, including the creation of the Nigeria Electronic Fraud Forum in 2011, the introduction of bank fraud desks in 2015, stricter KYC requirements using BVN or NIN in 2023, and the 2024 directive allowing NIBSS to debit banks that receive fraud proceeds.
The CBN defines APP fraud as situations where customers are tricked into authorising payments via channels such as WhatsApp, SMS, or email and includes institutional failures such as weak KYC, poor controls, staff collusion, delayed resolution, or failure to act on red flags.
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Victims must submit reports with transaction details within 72 hours. Banks must acknowledge complaints within 24 hours and immediately begin investigations, which must conclude within 14 working days.
During probes, the CBN may direct NIBSS to withhold settlement of suspicious funds, extending to downstream beneficiary institutions. Refunds must be issued within 48 hours after investigations close.
Where multiple banks are involved, the originating institution must notify others within 30 minutes, with reimbursements completed within 16 working days from the initial report.
Banks bear losses if failures in their systems allowed the fraud. Where neither banks nor customers are at fault, institutions share refund costs equally.
Customers qualify for reimbursement if they report promptly, cooperate fully, show no negligence or collusion, or were affected by weak controls.
Refunds are denied if customers acted fraudulently or negligently, reported after 72 hours, or if transactions occurred before the guideline’s start date.
Exceptions apply for illness, force majeure, unavailable reporting channels, or staff-related failures.
Failure to meet investigation timelines may attract regulatory sanctions, while dissatisfied customers can escalate complaints to the CBN. Supplying false or misleading information to the regulator will also be penalized.
Banks must maintain 24-hour reporting channels, deploy Early Warning Systems, flag risky accounts, monitor behaviour, document fraud trends, submit regular reports to the CBN, and carry out customer financial literacy campaigns.
The draft guidelines are open for public comments for three weeks before final adoption as part of the CBN’s broader financial system reform efforts.
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Image Credit: Punuka Attorneys & Solicitors
