CBN revises dormant account guidelines, drops affidavit r...

Nigeria's Central Bank has implemented a significant regulatory adjustment that carries meaningful implications for foreign investors and fintech operators operating within Africa's largest economy. The March 2026 circular rescinding affidavit requirements for dormant account reactivation represents more than a procedural simplification—it reflects a broader policy recalibration aimed at reducing friction in the financial system and expanding banking accessibility.

The background to this decision is rooted in a persistent challenge across West African banking sectors: the accumulation of dormant accounts that sit inactive for extended periods, often due to administrative or verification barriers rather than lack of customer interest. Previous CBN guidelines required customers to submit affidavits—costly, time-consuming legal documents—simply to regain access to their own funds. This created an unintended barrier that disproportionately affected lower-income segments and informal business operators, precisely the demographic groups that formal financial inclusion initiatives target.

The removal of this requirement addresses a structural inefficiency that has frustrated both financial institutions and their customers. From an operational perspective, banks faced mounting administrative costs processing affidavits while customers encountered delays ranging from weeks to months. For European investors evaluating market entry or expansion strategies in Nigeria's financial services sector, this regulatory shift signals the CBN's commitment to streamlining banking operations and reducing compliance costs.

The broader context matters significantly. Nigeria has struggled with financial inclusion metrics despite being Africa's largest economy by GDP. Approximately 37 million Nigerians remain unbanked, while many others maintain dormant accounts due to perceived complexity or cost. This regulatory adjustment addresses a genuine pain point that, while seemingly minor, creates meaningful friction in the system. When replicated across millions of potential reactivations, the cumulative effect improves banking system efficiency and customer retention.

For fintech companies and digital banking platforms—areas where European investors maintain substantial exposure—this development has nuanced implications. Traditional banks face reduced administrative burdens, potentially freeing resources for digitization efforts. Simultaneously, the policy creates opportunities for innovative solutions that facilitate account reactivation and customer re-engagement, whether through mobile platforms or automated verification systems.

The timing of this regulatory adjustment also reflects the CBN's broader modernization agenda. Under recent leadership, the central bank has pursued digital currency initiatives, payment system reforms, and regulatory sandboxes. Each step incrementally reduces friction and positions Nigeria's financial architecture more competitively. For investors in the broader West African fintech ecosystem, regulatory signals from Nigeria carry outsized weight given the nation's market size and influence.

However, investors should recognize potential implementation challenges. Regulatory circulars in Nigeria sometimes face inconsistent adoption across institutions or require operational clarification. Early adopters of this guideline may gain competitive advantages in customer service and operational efficiency, while laggards create market fragmentation.

The policy also raises questions about dormant account definitions and reactivation criteria. Clarification on verification standards replacing affidavits remains pending, and institutional interpretation could vary initially. This ambiguity creates both risk and opportunity—first-mover advantages for platforms that solve reactivation efficiently, but potential compliance headaches for institutions misinterpreting requirements.