CBN Cracks Down On Terror Financing, Places Nigerian Banks Under Tougher Regulatory Watch

• CBN elevates terrorism financing to a top supervisory priority: The apex bank has placed terrorism financing at the centre of its supervisory agenda, signalling tougher oversight of banks and other financial institutions to prevent the financial system from being exploited by criminal and terrorist networks.

• Banks face stricter monitoring of suspicious transactions and sanctions compliance: Financial institutions will be required to strengthen transaction monitoring systems, implement targeted financial sanctions effectively, and promptly report suspicious transactions linked to terrorism financing.

• Risk-based inspections to intensify across Nigeria’s financial sector: The CBN says it will deepen both on-site examinations and off-site surveillance to ensure compliance with Anti-Money Laundering, Counter-Terrorism Financing and Counter-Proliferation Financing regulations.

• Move reinforces Nigeria’s commitment to global financial integrity: The renewed supervisory focus is designed to strengthen Nigeria’s domestic and international cooperation in combating terrorism financing while safeguarding the integrity and stability of the country’s financial system.

September 09, () — The Central Bank of Nigeria (CBN) has launched a sweeping crackdown on terrorism financing, placing banks and other financial institutions under tougher regulatory watch as it intensifies efforts to protect Nigeria’s financial system from abuse by illicit actors.

The apex bank announced on Tuesday that terrorism financing has now been elevated to a current supervisory priority, underscoring its determination to strengthen compliance with anti-money laundering and counter-terrorism financing regulations across the financial sector.

In a statement signed by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, the CBN said the enhanced supervisory focus will target institutions’ terrorism financing risk management frameworks, transaction monitoring processes, implementation of targeted financial sanctions, and reporting of suspicious transactions connected to terrorism financing.

It explained that the initiative forms part of its broader commitment to preventing terrorist groups and other criminal organisations from exploiting Nigeria’s financial system to move or conceal illicit funds.

According to the CBN, it will continue to adopt a risk-based supervisory approach, combining on-site inspections with off-site monitoring to assess how effectively financial institutions comply with existing Anti-Money Laundering, Counter-Terrorism Financing and Counter-Proliferation Financing (AML/CFT/CPF) obligations.

The apex bank stressed that banks, fintech companies, microfinance banks and other regulated institutions are expected to strengthen internal controls, improve customer due diligence procedures, monitor high-risk transactions more effectively, and ensure timely reporting of suspicious financial activities.

It added that the intensified supervisory exercise also supports Nigeria’s ongoing collaboration with domestic and international partners to combat terrorism financing, counter proliferation financing, and promote financial integrity.

The CBN noted that it will undertake further supervisory engagements where necessary to address compliance gaps and reinforce regulatory expectations across the financial sector.