The Central Bank of Nigeria will sanction financial institutions including commercial banks for failure to obtain the necessary information on their customers.
GISTSMATE MEDIA had earlier reported that the CBN asked financial institutions to demand customers for their social media handles among several other information as part of Know Your Customer (KYC) requirements.
Banks are also expected to do an onsite verification of permanent addresses of customers as filled in their KYC forms.
The move, CBN hopes will help will enhance its fight against money laundering, terrorism financing, and proliferation financing, Punch reports.
CBN Sanctions On KYC
To ensure compliance with the regulation the CBN provided a list of sanctions for defaulting financial institutions.
The sanctions which are divided based on the nature of infractions and the type of financial institutions start from N200,000 to N10 million and are directed to the Managing Director (MD) Executive Compliance Officer(ECO), and Chief Compliance Officer(COO), and also the bank.
Breakdown Of CBN Sanctions
One of the infractions is for failure to undertake Customer Due Dilligence(CDD). CBN said for this infraction, it will make the non-compliant bank’s ECO pay a minimum penalty of N750,000. Also N500,000 fine will be paid by the DMBs CCO on other culpable employees. There is also a minimum penalty of N200,000 per customer without CDD.
The CBN’s document reads further:
“Payment Service Bank(PSP) failure to get customer details the penalty for the CCO will be N250,000 and N200,000 on other culpable employees. While A minimum penalty of N100,000 per customer will b paid.
“For Other financial instiutions: the CCO gets N100,000 –Bureau De Change N100,000 – Micro Finance Banks ,N200,000 – Finance Companies, N500,000 – Primary Mortgage Bank, N500,000 – Development Finance Institutions.
Also, CBN set N10 million fine for DMBs when they fail to keep and ensure customers’ records are up to date.
Source: Gistmate
