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In a recent circular, the Central Bank of Nigeria (CBN) announced that it would be working with law enforcement agencies to monitor banks for any suspicious activity related to the recapitalization process.
The circular, signed by the CBN’s Director of Financial Policy and Regulation, Haruna Mustafa, indicated that the CBN is taking a proactive approach to preventing illicit financing in the banking sector. The circular also outlined the new minimum capital requirements for banks, and emphasized the importance of compliance with all regulatory and legal requirements.
The circular clarified CBN’s intention to apply its robust anti-money laundering regulations vigorously. With the collaboration of relevant law enforcement agencies, the bank aims to ensure that the capital raised during the recapitalisation process is free from the taint of illegality.
According to the circular, banks are required to conduct comprehensive anti-money laundering screening checks. This includes Know Your Customer (KYC), Customer Due Diligence, and monitoring suspicious transactions to prevent the use of illicit funds in the recapitalisation exercise.
The circular reads in parts:
“The CBN has robust anti-money laundering regulations which will be strictly enforced, with the active collaboration of relevant law enforcement agencies.
“In addition, the CBN will require all banks to ensure that appropriate and effective anti-money laundering screening/checks (Know Your Customer, Customer Due Diligence and Suspicious Transactions Monitoring, etc) are conducted.”
Additionally, the circular addresses the vetting of new investors and significant shareholders. It emphasizes the need to ensure that only individuals and entities meeting the ‘Fit and Proper’ criteria are allowed to significantly invest in or own shares in banks.
This measure calls for the strict enforcement of background checks on all prospective significant shareholders, as well as directors and senior management staff, to uphold the sector’s leadership and ownership integrity.
