Business
Fintech Risks: Digital Banks More Exposed – IMF
The International Monetary Fund (IMF) Blog has alerted that fintech products such as digital banks are more exposed to risks than their traditional counterparts.
A new report seen by DAILY POST says fast-growing fintechs pose challenges for both regulators and less technologically advanced banks.
The authors, Antonio Garcia Pascual and Fabio Natalucci, warned that digital banks’ exposure also extends to higher risk-taking in their securities portfolio, as well as higher liquidity risks.
They observed liquid assets held by neobanks relative to their deposits tend to be lower than what would be held by traditional banks.
“These factors also create a challenge for regulators: the risk management systems and overall resilience of most neobanks remain untested in an economic downturn.
“Not only do FinTech firms take on more risks themselves, they also exert pressure on long-established industry rivals.
“Competitive pressure from FinTech firms significantly hurt profitability of traditional banks, and this trend is set to continue”, the article published on IMFBlog reads.
Pascual and Natalucci discovered digital banks rely on decentralized finance, a crypto-based financial network without a central intermediary.
READ ALSO: Nigeria Failed To Increase Export Diversification Overtime –IMF
The authors said though the platform, a.k.a. DeFi, offers the potential of more innovative, inclusive, and transparent financial services, it involves the buildup of leverage and is “vulnerable to market, liquidity, and cyber risks”.
They noted that cyberattacks, which can be severe for traditional banks, are often lethal for Digital banks, stealing financial assets and undermining user trust.
The report further informed the public that the lack of deposit insurance in DeFi adds to the perception of all deposits being at risk.
Business
CBN Retains Interest Rate At 27%
The Monetary Policy Committee of the Central Bank of Nigeria has voted to retain the benchmark interest rate at 27 per cent.
CBN Governor, Olayemi Cardoso, announced the decision on Tuesday following the apex bank’s 303rd MPC meeting in Abuja.
Cardoso stated that the committee also resolved to keep all other monetary policy indicators unchanged.
READ ALSO:CBN Issues Directive Clarifying Holding Companies’ Minimum Capital
He noted that the Cash Reserve Ratio (CRR) remains at 45 per cent for commercial banks and 16 per cent for merchant banks, while the 75 per cent CRR on non-TSA public sector deposits was equally maintained.
Cardoso added that the Liquidity Ratio was retained at 30 per cent, and the Standing Facilities Corridor was adjusted to +50/-450 basis points around the Monetary Policy Rate.
The decision comes as Nigeria records its seventh consecutive month of declining inflation, which eased to 16.05 per cent in September 2025.
Business
CBN Issues Directive Clarifying Holding Companies’ Minimum Capital
The Central Bank of Nigeria, CBN, has issued a definitive directive detailing how financial holding companies should calculate their minimum paid-up capital, following weeks of confusion that delayed the release of some banks’ half-year and nine-month financial statements.
In a circular dated November 14, 2025, the apex bank acknowledged “divergent interpretations” of the term minimum paid-up capital as stated in Section 7.1 of the 2014 Guidelines for Licensing and Regulation of Financial Holding Companies.
To eliminate ambiguity, the CBN ruled that minimum paid-up capital must be computed strictly as the par value of issued shares plus any share premium arising from their issuance.
READ ALSO:CBN Sets POS Maximum Transactions In Fresh Guidelines
“All Financial Holding Companies are required to apply this definition in computing their minimum capital requirement—without exception for subsidiaries,” the circular stated.
The regulator added that the directive takes immediate effect, noting that any previous interpretation that does not align with the new clarification “should be discontinued forthwith.”
The move is expected to calm market anxiety and provide clarity for lenders navigating ongoing regulatory capital requirements.
Business
Naira Records Massive Week-on-week Depreciation Against US Dollar
The Nigerian Naira recorded massive week-on-week losses against the United States dollar at the official foreign exchange market.
The Central Bank of Nigeria’s exchange rate showed that the Naira dipped significantly to end the week at N1,456.73 on Friday, November 21, 2025, down from N1,442.43 traded on November 14.
This means that on a weekly basis, the Naira shed N14.06 against the dollar at the official market.
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However, at the black market, currently battling with low patronage, it remained stable at N1,465, the same rate traded last week.
The development comes despite Nigeria’s foreign reserves rising by 1.25 per cent to $43.64 billion in the last week.
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