By Tony Obiechina, Abuja
In a determined effort to fight financial crimes, the Central Bank of Nigeria (CBN) has included social media handle among items needed for Know Your Customer (KYC) requirements for bank customers.
Consequently, the apex bank has released its 2023 Customer Due Diligence Regulations for financial institutions under its regulatory purview as it takes a decisive stance against financial crimes.
According to CBN, the latest move aims to bolster compliance with anti-money laundering and counter-terrorism financing provisions while aligning with international best practices.
The new CBN customer due diligence rules applies to both individuals and legal entities.
Customer Due Diligence Regulations 2023 requires financial institutions to establish internal processes and procedures to carry out customer due diligence measures for potential and existing customers along with occasional customers.
Banks and other financial institutions must identify customers, either individuals or legal entities, and obtain specific information such as legal names, addresses, contact details, identification documents, account types, nature of banking relationships, and signatures. The regulations emphasise the need to identify politically exposed persons.
To verify customer identities, financial institutions must engage reliable and independent source documents, data, or information.
For individuals, this involves confirming date of birth, residential address, contact details, and the validity of official documentation.
In the case of legal persons or legal arrangements, financial institutions are required to undertake searches on public registries or databases, review annual reports or relevant financial statements, and examine board resolutions.
The regulations emphasise the importance of record-keeping and maintaining up-to-date customer information.
Financial institutions must retain records obtained through customer due diligence measures, account files, business correspondence, and analysis results for at least five years after the termination or cessation of a business relationship or an occasional transaction.
Regular reviews of existing customer records are required based on risk categories, with high-risk customers requiring annual reviews, medium-risk customers requiring reviews every 18 months, and low-risk customers requiring reviews every three years.
