CBN Tightens Surveillance on Banks over Terrorism Financing

The Central Bank of Nigeria has intensified surveillance on banks and other financial institutions over terrorism financing risks as part of efforts to prevent the country’s financial system from being exploited by illicit actors.

The apex bank said terrorism financing supervision had been elevated to a current supervisory priority, with greater attention to transaction monitoring, suspicious transaction reporting and compliance with targeted financial sanctions.

The CBN disclosed this in a press statement issued on Tuesday and signed by the Acting Director, Corporate Communications and Investor Relations Department, Hakama Sidi-Ali.

“The Central Bank of Nigeria has elevated terrorism financing supervision to a current supervisory priority, as part of its ongoing commitment to protecting the Nigerian financial system from abuse by illicit actors,” the bank said.

The move signals increased regulatory scrutiny of financial institutions’ systems for identifying and managing transactions that could be linked to terrorism financing.

According to the CBN, its supervisory attention will cover four major areas, including terrorism financing risk management, transaction monitoring, implementation of targeted financial sanctions and the reporting of suspicious transactions linked to terrorism financing.

The development means banks and other regulated financial institutions are expected to maintain systems capable of identifying unusual transactions and complying with existing anti-money laundering and counter-terrorism financing requirements.

The CBN said it would continue to deploy a risk-based approach to supervision, combining physical examinations of financial institutions with off-site monitoring.

“The Bank will continue to apply a risk-based supervisory approach, including on-site and off-site engagement, to support effective AML/CFT/CPF controls across the financial sector in line with existing legal and regulatory obligations,” the statement read.

AML/CFT/CPF refers to measures against money laundering, terrorism financing and proliferation financing.

Under a risk-based supervisory framework, regulatory attention is typically concentrated on institutions, customers, transactions or activities considered to pose greater financial crime risks rather than applying the same level of scrutiny across the financial system.

The latest directive also puts attention on the implementation of targeted financial sanctions, which form part of measures designed to prevent designated individuals and entities from accessing or moving funds through the formal financial system.

Suspicious transaction reporting is another major component of the CBN’s latest supervisory focus. Financial institutions are required under existing regulatory frameworks to monitor customer activities and report transactions that raise concerns about potential financial crimes.

The CBN added that the heightened focus was part of Nigeria’s broader domestic and international efforts to combat terrorism financing and other threats to the integrity of the financial system.

“This supervisory focus also supports Nigeria’s ongoing domestic and international cooperation on counter-terrorism financing, counter-proliferation financing, financial integrity, and the protection of the financial system,” the bank stated.

The regulator added that further supervisory engagements would be undertaken where necessary.

The PUNCH recently reported that the CBN directed banks and other financial institutions to immediately freeze the accounts and assets of individuals and companies designated for terrorism and terrorism financing, following fresh sanctions issued by Nigerian and United States authorities.

The directive was contained in a circular dated June 24, 2026, issued by the CBN’s Compliance Department and addressed to all banks, Payment Service Banks and other financial institutions regulated under the Banks and Other Financial Institutions Act 2020.

According to the circular, the action followed earlier sanctions designations by the Nigeria Sanctions Committee and the United States Department of the Treasury’s Office of Foreign Assets Control under Executive Order 13224, as amended, on terrorism and terrorism financing.