The Central Bank of Nigeria (CBN) has announced that it will be paying closer attention to how banks and other financial institutions in the country are being used, or misused, to move money that could fund terrorism.
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In a statement signed by Hakama Sidi-Ali, acting Director of the apex bank’s Corporate Communications and Investor Relations Department on Tuesday, the CBN said it has made terrorism financing supervision one of its current priorities. According to the statement, this is part of the bank’s “ongoing commitment to protecting the Nigerian financial system from abuse by illicit actors.”
What this means in plain terms is that the CBN will be looking more closely at how banks identify and manage the risk of their platforms being used to fund terrorism, how well they monitor suspicious transactions linked to terrorism financing, how they carry out sanctions ordered against specific individuals or groups, and how promptly they report suspicious activity connected to terrorism financing.
The statement explained that this new push covers four broad areas: how financial institutions manage terrorism financing risk, how they monitor transactions for signs of terrorism financing, how they carry out targeted financial sanctions, and how they report suspicious transactions linked to terrorism.
The apex bank said it will not be sitting back and waiting for problems to surface on their own. Instead, it plans to use a risk-based approach, which means banks and institutions seen as more exposed to this kind of risk will attract closer attention.
This will involve both on-site inspections, where CBN officials visit institutions directly, and off-site checks, where the bank reviews reports and data from a distance.
The goal, the statement said, is to support “effective Anti-Money Laundering, Countering the Financing of Terrorism and Countering Proliferation Financing (AML/CFT/CPF) controls across the financial sector,” referring to the fight against money laundering, terrorism financing, and the financing of weapons proliferation, all of which are governed by existing Nigerian laws and regulations.
The CBN also linked this move to Nigeria’s wider efforts, both at home and internationally, to fight terrorism financing and the financing of weapons proliferation, and to protect the integrity of the country’s financial system.
The apex Bank did not name any specific institution under investigation or give a timeline for these actions, but noted that “further supervisory engagement will be undertaken as appropriate,” suggesting that more steps could follow depending on what its checks turn up.
For the ordinary Nigerian, the announcement signals that the CBN wants banks to be more careful and more accountable in how they track the movement of money through the financial system, particularly where there is any possible link to terrorism or the funding of violent groups.
It is also a reminder that financial institutions operating in Nigeria are expected to follow strict rules designed to keep the banking system safe from being used for illegal purposes.