The Central Bank of Nigeria has begun tightening its watch over banks and other financial institutions in a fresh effort to expose and disrupt financial channels that could be used to fund terrorism.
Rather than waiting for financial institutions to breach existing rules, the apex bank said it would intensify risk-based monitoring, with institutions considered more vulnerable to terrorism financing facing closer regulatory scrutiny.
The move is part of broader efforts to strengthen Nigeria’s financial system against illicit financial flows and prevent criminal networks from exploiting legitimate banking and financial channels.
The CBN’s Acting Director, Corporate Communications and Investor Relations Department, Hakama Sidi-Ali, disclosed this in a statement on Wednesday.
She said the regulator’s enhanced supervision would focus on how financial institutions identify and manage terrorism-financing risks, detect suspicious transactions, enforce targeted financial sanctions and report transactions linked to terrorism financing.
According to Sidi-Ali, the CBN will combine on-site and off-site examinations to test the effectiveness of financial institutions’ anti-money laundering and counter-terrorism financing controls.
She said institutions with greater exposure to terrorism-financing risks would receive closer attention under the new supervisory approach.
The CBN said the initiative would also strengthen Nigeria’s cooperation with domestic and international partners in combating terrorism financing, proliferation financing and other threats to financial integrity.
The development follows the recent designation of six individuals and three entities by the Nigeria Sanctions Committee as terrorist financiers under the Terrorism Prevention and Prohibition Act 2022.
Those designated include Babangida Muhammed Adamu Hammajam, Abdullahi Umar Usman, Ibrahim Abubakar, Adamu Chiroma, Muktar Muhammad Adamu and Yakubu Ogirima Ibrahim.
The three entities are Nine to Nine BDC Ltd, Generation Currency BDC Ltd and Abbal Bako & Sons Bureau De Change.
The sanctions committee alleged that the individuals and entities were involved in financing or facilitating financial transactions linked to terrorist activities, including networks associated with the Islamic State West Africa Province.
The CBN said the latest supervisory measures would complement wider government efforts to choke illicit financial networks and ensure that the country’s financial system is not turned into a channel for terrorism financing.
It warned that further supervisory action would be taken where financial institutions fail to meet existing regulatory and legal requirements.