As the nation’s financial regulatory authority, the Central Bank of Nigeria (CBN) plays a crucial role in maintaining monetary stability and fostering a sound financial environment in Nigeria. In line with its mandate, the Central Bank of Nigeria has recently introduced a new set of customer due diligence regulations.
The introduction of these new regulations is the CBN’s latest step towards enhancing the identification process within the banking system. This development is part of the bank’s ongoing commitment to ensure the integrity and transparency of financial transactions, with a view to protecting customers and promoting financial stability.
According to the Central Bank of Nigeria’s newly released ‘Customer Due Diligence Regulations, 2023′, financial institutions are now required to obtain detailed customer information. This includes customers’ social media handles, e-mail addresses, telephone numbers, residential addresses, and other personal details.
The new regulations aim to supplement existing customer due diligence measures that financial institutions must follow. This directive stems from the Central Bank of Nigeria’s regulatory jurisdiction over these institutions and forms part of broader compliance efforts aligned with the provisions of the Money Laundering (Prevention and Prohibition) Act (MLPPA) 2022, the Terrorism (Prevention and Prohibition) Act (TPPA) 2022, and the Central Bank of Nigeria’s Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions Regulations, 2022 (CBN AML, CFT, and CPF Regulations). This initiative also aligns with international best practices.
The Central Bank of Nigeria’s directives under the customer identification section are detailed and extensive. Financial institutions are mandated to identify their customers, whether they are permanent or occasional, natural persons or legal entities, and to gather a host of information.
For individual customers, financial institutions are required to obtain their legal name, including any other names used (such as maiden names), permanent and residential addresses, telephone numbers, e-mail addresses, and social media handles. Other required details include date and place of birth, Bank Verification Number, Tax Identification Number, nationality, occupation, public position held (if any), and the name of the customer’s employer. The Central Bank also requires individuals to provide valid identification in the form of an unexpired passport, national identification card, residence permit, social security records, or driver’s license.
Furthermore, the nature of the account, type of banking relationship, customer signature, and politically exposed person status are also deemed necessary pieces of information for financial institutions to collect, under these new regulations.
In addition to individual customers, the Central Bank of Nigeria has specified requirements for legal entities and arrangements. All these measures reaffirm the CBN’s commitment to ensuring that financial institutions under its purview maintain robust due diligence procedures.
In conclusion, the Central Bank of Nigeria’s new customer due diligence regulations serve as a progressive step towards increasing transparency and accountability within Nigeria’s banking system. These measures are expected to strengthen the country’s financial institutions, fostering a more secure and stable economic environment for all.