CBN Issues AML/CFT/CPF Guidelines for Licencing Banks and other Financial Institutions

Richard Marley

December 02, 2022

The Central Bank of Nigeria (CBN) has issued guidelines to assist promoters of banks and other financial institutions in fulfilling AML/CFT/CPF standards while they apply for operational licenses.

The apex bank stated it’s for use by people and businesses requesting a license to operate as banks and other financial institutions.

The guideline is issued to comply with the Anti-Money Laundering, Combating The Financing of Terrorism, and Countering Proliferation Financing of Weapons of Mass Destruction (AML/CFT/CPF). Anybody applying for a license is obligated to consider the requirements, which are also mentioned in the guidelines.

The central bank has, for the first time, published strict standards that align its application process for banking licenses with considerations for the financing of terrorism, the purchase of weapons, and other forms of instability. Due to this, acquiring a banking license will likely become considerably more challenging and rigorous.

The CBN would be probing the shareholders of potential bank applicants more comprehensively than before, paying close attention to anyone who potentially has a history of criminal activity or links to criminals.

One significant and compelling conclusion is that applicants should be wary of penalties, especially those imposed by foreign countries and Nigerians. The outcome of their applications may be impacted, for instance, if the funders or supporters of bank clients are from nations that have already been sanctioned.

The criteria’ scope includes both fresh and pending applications. Although the rules list criteria for licensing applications, including applicability, these are insufficient explanations to reject application forms for just a banking license.