CBN insists on January deadline for banks to localise payment data

The Central Bank of Nigeria (CBN) yesterday insisted that its earlier January 1, 2027 implementation deadline for banks and other regulated institutions to localise critical payment transaction data is sacrosanct.

CBN Deputy Governor, Financial System Stability, Lamido Abubakar Yuguda broke the news at CBN-National Information Technology Development Agency (NITDA) Executive Regulatory Dialogue on the National Sovereign Cloud Initiative (NSCI) and data localisation in Lagos.

He warned that deliberate attempts to frustrate compliance will attract sanctions.

“Regulated institutions are expected to ensure that critical payment transaction data is stored and managed within Nigeria in accordance with applicable regulatory requirements and the 1 January 2027 implementation timeline. The objective is to enhance regulatory visibility, strengthen resilience, and safeguard critical financial data,” he said.

He said the policy was aimed at strengthening financial system stability, improving regulatory oversight and safeguarding critical financial data amid the growing dependence on digital banking, fintech and electronic payment services.

Yuguda said the resilience of Nigeria’s financial system increasingly depended on the security and reliability of the digital infrastructure supporting its operations.

He noted that while cloud computing offered financial institutions opportunities for greater efficiency, flexibility and innovation, it also raised concerns about cybersecurity, data protection, operational resilience and dependence on third-party technology providers.

According to him, the National Sovereign Cloud Initiative provides an opportunity to strengthen Nigeria’s digital resilience, develop domestic technological capacity and improve protection of critical financial data.

He said financial institutions must ensure that critical payment transaction data was stored and managed within Nigeria in line with applicable regulatory requirements and the January 1, 2027 implementation deadline.

The deputy governor, however, cautioned that data localisation alone would not guarantee security, stressing the need for robust cybersecurity, business continuity, disaster recovery and risk-management measures.

He added that financial institutions would remain responsible for managing risks associated with their relationships with cloud service providers and other technology partners.

Also speaking, the Director-General of NITDA, Kashifu Inuwa Abdullahi, disclosed that a survey conducted ahead of the dialogue showed that 57 per cent of financial institutions were ready to comply with the data localisation requirements by the deadline.

He said the engagement was organised to assess the preparedness of financial institutions and provide guidance to those yet to meet the requirements.

Abdullahi explained that the NSCI was a national framework covering different sectors, with the financial sector being among those required to comply with its provisions.

He said the initiative was designed to strengthen Nigeria’s control over its digital infrastructure and ensure that external disruptions did not prevent citizens from accessing essential digital services.

The NITDA chief added that the government would also establish a compliance timeline for ministries, departments and agencies (MDAs), noting that the financial sector was being prioritised because of its advanced level of digitalisation.

He disclosed that 326 MDAs had spent more than N3.8 trillion on technology between June 2023 and October 2026, adding that some of the investments could be consolidated through cloud infrastructure to improve the delivery of government digital services.

The Director of the CBN’s Payment Systems Supervision Department, Dr Rakiya Opemi Yusuf, said the dialogue was convened to address concerns and clarify expectations surrounding the directive.

Yusuf said the bank expected all relevant institutions to comply by January 2027, adding that the CBN would prioritise engagement and support for institutions facing implementation challenges.

She, however, warned that sanctions would apply where institutions deliberately attempted to undermine compliance.

“Sanctions is really not the first in our mind when it comes to enforcement. What is really first in our mind is to ensure that everybody is hand-holding to be able to achieve compliance with the regulation,” she said.

She added that the CBN would assess feedback from stakeholders and consider the merits of proposals for any adjustments that might be necessary.

Yusuf said the bank had strengthened its oversight of the payments ecosystem through the establishment of the Payment Systems Supervision Department in 2025, adding that the department would ensure appropriate supervision of the sector.

She said the policy was ultimately intended to enhance Nigeria’s sovereignty over its payment transaction data, improve regulatory visibility and reinforce financial system stability.

Yuguda said the CBN would continue to collaborate with NITDA, financial institutions and technology providers to ensure that the transition strengthened security without undermining innovation or the competitiveness of Nigeria’s financial sector.

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