CBN Tightens AML/CFT Supervision Across Financial Sector
Nigeria’s Central Bank has reaffirmed its commitment to strengthening oversight of the country’s financial sector through a risk-based supervisory approach aimed at improving controls against money laundering, terrorism financing and proliferation financing.
The CBN said it would continue to deploy both on-site and off-site supervisory engagements to ensure that financial institutions maintain effective systems for preventing, detecting and reporting illicit financial activities.
According to the apex bank, the approach is designed to support compliance with existing legal and regulatory requirements while strengthening the overall integrity and resilience of Nigeria’s financial system.
It said the supervisory strategy would focus on assessing the effectiveness of anti-money laundering and countering the financing of terrorism and proliferation financing (AML/CFT/CPF) frameworks operated by institutions across the financial sector.
The bank’s position comes amid growing emphasis globally on strengthening financial safeguards against the movement of illicit funds, terrorist financing and financing linked to the proliferation of weapons of mass destruction.
CBN said its supervisory activities would not be limited to periodic reviews, but would involve a combination of on-site examinations and off-site monitoring to identify potential weaknesses and ensure that regulated institutions address identified risks.
It explained that the supervisory focus was also intended to support Nigeria’s continuing domestic and international cooperation in the areas of counter-terrorism financing, counter-proliferation financing and financial integrity.
The bank noted that maintaining strong AML/CFT/CPF controls was critical to protecting the financial system from abuse by criminal networks and other actors seeking to exploit financial institutions for illicit purposes.
“Supervisory focus also supports Nigeria’s ongoing domestic and international cooperation on counter-terrorism financing, counter-proliferation financing, financial integrity, and the protection of the financial system,” the bank said.
The CBN stressed that financial institutions would continue to be subject to supervisory scrutiny based on the risks associated with their operations, with institutions expected to maintain appropriate controls and comply with applicable laws and regulations.
A risk-based approach allows regulators to concentrate supervisory resources on areas, institutions and activities considered to present higher levels of financial crime risk, rather than applying the same level of scrutiny uniformly across the sector.
The bank also indicated that its supervisory engagement would remain responsive to developments within the financial system and emerging risks.
It assured stakeholders that further supervisory engagement would be undertaken where necessary, signalling that regulated institutions could face additional reviews or interventions where circumstances warrant.
The renewed supervisory emphasis is expected to reinforce efforts to preserve confidence in Nigeria’s financial system while ensuring that banks and other financial institutions remain aligned with domestic regulatory requirements and international standards on financial crime prevention.
By combining on-site inspections with off-site monitoring, the apex bank said it would continue to assess the effectiveness of existing controls and take appropriate supervisory action where necessary.
