As banks in the Nigerian banking sector go through the process of recapitalization within the next 24 months, the Central Bank of Nigeria (CBN)has disclosed that law enforcement agencies will be on the lookout to closely monitor the process to prevent the influx of illicit financing into the sector.
This development was announced in a circular titled “Review of Minimum Capital Requirements for Commercial, Merchant and Non-Interest Banks in Nigeria” signed by Mr Haruna Mustafa, the Director of the Financial Policy and Regulation Department at the CBN.
The circular mandated banks to do anti-money laundering screening as the apex bank disclosed its intention to apply its robust anti-money laundering regulations vigorously with the collaboration of relevant law enforcement agencies to ensure that the capital raised during the recapitalisation process is free from the taint of illegality.
The circular reads “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.”
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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.
The circular added: “The CBN will actively monitor and supervise the recapitalization process to ensure compliance with set guidelines.
“This will involve the conduct of on- and off-site reviews, verification of capital, periodic interventions when necessary and broader stakeholder engagements.”
