CBN TURNS UP HEAT ON BANKS OVER TERROR FINANCING, SUSPICIOUS TRANSACTIONS

The Central Bank of Nigeria has elevated terrorism financing to a current supervisory priority, putting banks and other regulated financial institutions under tighter scrutiny over transaction monitoring, suspicious transaction reporting and targeted financial sanctions.

The CBN said its intensified supervision will focus on how financial institutions identify, manage and report risks linked to terrorism financing, with particular attention to the effectiveness of existing AML, counter-terrorist financing and counter-proliferation financing controls.

The regulator said its supervisory focus will cover four areas, terrorism financing risk management, transaction monitoring, implementation of targeted financial sanctions and suspicious transaction reporting linked to terrorism financing.

The new approach will combine on-site examinations with off-site monitoring, allowing the CBN to assess institutions’ controls, reporting processes and compliance with existing legal and regulatory obligations.

The move comes as Nigeria strengthens implementation of targeted financial sanctions against designated individuals and entities. In June, the CBN directed banks, payment service banks and other regulated financial institutions to implement fresh sanctions designations issued by the Nigeria Sanctions Committee and the US Treasury’s Office of Foreign Assets Control under Executive Order 13224.

For compliance officers, the latest supervisory push raises the stakes around sanctions screening, transaction monitoring, escalation procedures and the timely filing of suspicious transaction reports.

The CBN’s emphasis also places greater pressure on institutions to demonstrate that their AML/CFT/CPF frameworks work in practice, rather than merely exist as policies on paper.

The regulator said further supervisory engagements would be undertaken where necessary as Nigeria deepens domestic and international cooperation against terrorism financing, proliferation financing and wider threats to financial integrity.