Panic as Piggyvest, Risevest, others deactivate users’ Providus Bank accounts

Nigerians were thrown into a world of panic on Sunday as major technology-driven financial institutions removed their bank account details on their platforms.

Some of the fintech firms include investment and savings platform Piggyvest, Risevest, Agropartnership, Chaka and others. The removal of the account details is not a coincidence. All fintechs that make use of virtual accounts provided by Providus Bank for subscribers’ savings and investments announced the change.

“We received information from our virtual account provider that the existing Providus Virtual Accounts are inactive,” Piggyvest said in a statement.

Consequently, the fintech company had to change the bank account connected to each users’ savings on Piggyvest.

The company assured users of the platform that all their funds are safe and secured.

Another fintech Monnify in an email to users disclosed that Providus Bank decided that it will no longer support their virtual accounts on Friday.

Monnify asked its users not to panic as it is “working with the bank (Providus) to reconcile as monies in their position for availability and a graceful exit.”

The fintech assured its users that will “be back with a new partner bank” to accommodate funds and investments in their custody.

Fundall also sent a similar email to its users, saying they will not be able to fund their savings account on the platform at the moment on Sunday.

The fintech disclosed to its users that it is working on taking control of “our processes and reduce reliance on third parties.”

“We will be completing the integration in the coming weeks,” Fundall said in an email to users.

A stock micro-investment platform Trove Finance was also affected by the change experienced by other fintech companies.

“We will issue new account numbers soon,” Trove Finance tweeted. “Cards and other payment channels remain active.

“Note: This doesn’t affect funds in your wallet.”

While the cause of the withdrawal of Providus Bank from its partnership with the fintechs is unknown, many believe that it may be connected to the recent policy by the Central Bank of Nigeria.

CBN on Friday directed banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

CBN gave the directive in a circular distributed to deposit money banks (DMBs), non-bank financial institutions (NBFIs), and other financial institutions (OFIs).

Many of the fintechs whose partnership with Providus Bank was halted are involved in crytocurrency investments – buying, selling and conversion to the Nigerian naira currency.

“Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited,” CBN’s director for banking supervision Bello Hassan and director of the payment system management department Musa Jimoh said in the circular.

Many Nigerians have continued to accuse the government of implementing anti-people policies.

“The ripple effect of the clampdown on cryptocurrency trading accounts and now Providus Virtual account is worrisome,” Wale Adetona, a digital marketer tweeted. “This is an obvious attack on Fintechs.” (The Guardian)