CBN Issues 8 New Guidelines For Banking Licence, Flags Terrorism Financing

New and pending requests for banking licence could be rejected on the grounds of Money Laundering and Terror Financing history, the Central Bank of Nigeria (CBN) has disclosed in new guidelines.

The central bank released the guidelines for individuals and entities in need of a banking licence, stating that the applicants must adhere to requirements on Anti-Money Laundering (AML), Combating The Financing of Terrorism (CFT), and Countering Proliferation Financing of Weapons of Mass Destruction (CPF). 

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Why CBN’s new guidelines on banking licence are important

In the guidelines dated November 23, the financial regulator stated that the objectives are to; 

• Guide promoters in complying with AML/CFT/CPF requirements in licence applications for banks and other financial institutions.
• Ensure that proceeds of crimes are not used to establish financial institutions.
• Ensure that criminals do not own or control financial institutions in Nigeria.
• Identify and verify the beneficial owners of financial institutions.
• Ensure that promoters of financial institutions put in place appropriate and effective measures to mitigate ML/TF/PF risks

CBN’s new guidelines for banking licence

The central bank said misrepresentation of facts, inability to address terrorism financing amongst other listed requirements; 

• Failure to demonstrate understanding of the ML/TF/PF risks inherent in the business
• Inability to address the AML/CFT/CPF licensing requirements satisfactorily, especially during the capital verification exercise
• Misrepresentation of facts and false declaration
• Criminal record of a party to the application indicating conviction or any other offence that constitutes financial crime
• Opaque ownership structure
• Discovery that a party to the application is on the sanctions lists; United Nations Security Council (UNSC), United States Office of Foreign Assets Control (OFAC), Her Majesty’s Treasury, United Kingdom (HMT), European Union (EU); v. French Ministry of Economy, Finance and Industry (MINEFI), Nigerian sanctions list; and Any other sanctions list as may be advised from time to time.
• Inability to address observed deficiencies in licencing application within specified timeline.
• Any other condition that the CBN may specify.