THE Central Bank of Nigeria (CBN) has made it mandatory for financial institutions to collect and verify customers’ social media handles as part of the institutions’ Know Your Customer (KYC) requirements.
The CBN made this known on June 23 when it released its Customer Due Diligence Regulations 2023 for financial institutions under its regulatory purview, as it takes a decisive stance against financial crimes.
The apex bank explained that the move was geared towards bolstering bank customers’ compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) provisions, while aligning with international best practices.
Thabo Mbeki’s report on illicit financial flow in Africa had put such flow at $80 billion annually, raising concerns over rising terrorism in the continent.
The new regulations, which complement existing provisions outlined in the CBN’s Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions Regulations of 2022, were designed to fortify the fight against money laundering, terrorism financing, and proliferation financing.
Under the new regulations, financial institutions are required to establish internal processes and procedures for conducting customer due diligence measures for both potential and existing customers, including occasional customers.
They must identify customers, whether individuals or legal entities, and obtain specific information like legal names, addresses, contact details, identification documents, account types, nature of banking relationships, and signatures. Furthermore, the regulations emphasise the need to identify politically exposed persons (PEPs).
To verify customer identities, financial institutions must rely on 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 also 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.
ICIR