The Central Bank of Nigeria (CBN) has taken a decisive step to protect consumers by ordering all banks and regulated financial institutions to immediately withdraw misleading advertisements from the market.
New Framework for Financial Advertising
In a circular issued on Thursday and signed by Olubunmi Ayodele-Oni on behalf of the Director of the CBN's Compliance Department, the apex bank established a new framework for financial advertising. This directive follows a thematic industry review that uncovered widespread inconsistencies in how institutions interpret their obligations under existing consumer protection laws.
The review found that many financial institutions were not properly adhering to the Consumer Protection Regulations 2019 and the 2000 Guidelines on Advertisements by Deposit-Taking Financial Institutions. This prompted the CBN to issue clarifications to ensure all future advertisements meet higher standards of transparency and accuracy.
Key Prohibitions and Requirements
Under the new guidelines, the CBN has explicitly banned several advertising practices that could mislead consumers. Financial institutions must ensure that all advertisements are factual, balanced, and transparent, with no room for misleading claims or omission of risks.
The CBN specifically prohibited several practices including:
- Exaggerating benefits or omitting critical information
- Referencing unaudited financial statements
- Using comparative or superlative statements
- Employing de-marketing tactics against competitors
- Offering promotional inducements like lotteries and prize draws
Perhaps the most significant change requires institutions to notify the CBN before releasing any advertisement. These notifications must include detailed information about the advert's duration, creative content, target audience, and evidence of internal compliance clearance.
Compliance Timeline and Consequences
Financial institutions have been given a 30-day deadline to submit a compliance attestation jointly signed by their Managing Director/CEO, Executive Compliance Officer, and Chief Compliance Officer. This document must confirm that all advertising practices align with regulatory requirements.
The CBN emphasized that starting January 2026, it will conduct follow-up reviews and apply sanctions to any institution found violating the rules. These sanctions will be imposed under the Banks and Other Financial Institutions Act (BOFIA) 2020 and the Consumer Protection Regulations.
This move represents the CBN's continued effort to strengthen market integrity and ensure Nigerian consumers receive accurate information when making financial decisions. The timing coincides with the bank's ongoing recapitalization exercise, where 16 banks have already met their targets according to recent CBN announcements.
