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CBN sets money laundering radar on MFBs, OFIs, may revoke licences if…

Relying on recent revelation by the Minister of Finance, Mrs. Kemi Adeosun that looters of the treasury may have moved their illicit trade to Micro Finance Banks (MFBs) and other financial institutions (OFIs), due to the water tight blockage placed by the introduction of BVN, the Central Bank of Nigeria (CBN) has began surveillance on the sub sector on issues of non-compliance with anti-money laundering and combating terrorism financing, AML/CFT, regulations.

Accordingly, the apex bank on the ad vise of the Minister has given the sector till August this year to comply with the BVN regulation to maintain total blockage across all banking sectors of the economy.

However, whereas the terminal date is awaited, CBN has made it clear that it would revoke the operating licences of MFBs and OFIs caught in the act.

Director, Other Financial Institutions Supervision Department of the CBN, Mrs. Tokunbo Martins stated this in a letter to OFIs, stressing that “The Central Bank of Nigeria has observed with concern the general low level of rendition of AML/CFT returns by OFIs, contrary to regulatory requirement. This has hampered supervisory efforts to effectively assess and mitigate money laundering risks in the industry”.

“For the avoidance of doubt, it must be reiterated that the relevant provisions of the Money Laundering Prohibition Act 2011 (as amended) and CBN AML/CFT Regulations, 2013, require banks and other financial institutions, OFIs, to render various returns to the CBN and Nigeria Financial Intelligence Unit, NFIU.

“These returns include: Currency Transaction Reports, CTR; Suspicious Transactions Report, STRs; Foreign currency transactions reports, FIRS; Risk Assessment Report, Politically Exposed Persons, PEPs; Annual Employee Education and Training programme, Compliance with Employee Training Program, Monitoring of Employee conduct, three Tiered KYC and Testing for the Adequacy of AML/CFT Compliance.

“Please note that failure to render statutory returns and comply with regulatory directives will attract appropriate sanctions, including the revocation of operating licence,” CBN said.