Tuesday, October 20, 2020

Nigeria: Central Bank sanctions four banks for money laundering and lax KYC controls

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The Central Bank of Nigeria and Financial Reporting Council of Nigeria sanctioned four commercial banks between January and June for various infractions, our correspondent has learnt.

It was learnt that the apex bank imposed a number of sanctions on the banks for failure to comply with its Know-Your-Customers guidelines and in the anti-money laundering requirement.

The banks disclosed the sanctions in their audited financial statements for the six months ended June.

For its infractions, GTBank Plc was asked to pay N10m while the United Bank for Africa Plc and Access Bank Plc were asked to pay N8m each. Fidelity Bank Plc was sanctioned N4m by the regulating body.

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GTBank disclosed in its audited financial statement for six months ended June 30 that it was sanctioned N2m for Anti-Money laundering/ Combating the Financing of Terrorism regulation on three-tiered KYC and N8m for 2018 risk- based examination findings.

The bank explained that it was committed to fight all forms of financial crime including money laundering, terrorist financing, bribery and corruption.

It said, “To this end, the bank has continually implemented a framework for AML/CFT and the prevention of the financing and proliferation of weapons of mass destruction.”

Access Bank was sanctioned N4m over failure to comply with anti-money laundering requirement and additional N4m in respect of failure to comply with the apex bank’s manual of operations for fund transfer.

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UBA, on the other hand, was sanctioned N2m for late resolution of customer compliants and N6m for deficiency in account documentation/late records retrieval.

A former President/Chairman of Council, Chartered Institute of Bankers of Nigeria, Prof Segun Ajibola, explained to our correspondent that sanctions in the banking sector came in different categories.

He said, “They are different categories of sanctions in the banking industry. There are sanctions that are regulatory in nature when certain specifications are given and banks are unable to meet them.

“There are penalties that are operational in nature like violating the CBN guidelines. There are also contraventions when banks are unable to meet up lending a certain fraction of loans portfolio to agriculture sector. It is expected by the end of the day the CBN imposes sanctions.

“There are some sanctions that can be ethical in nature. It might involve banks involved in round-tripping foreign exchange – that is unethical practice. A bank that decided to accommodate AML/CFT without conducting due diligent has ethical issues.

“Some infractions are environmental in nature.”

He added that customers were given more sympathy than banks as it was more convenient to sanction banks than the customer.

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