Published On: Fri, Aug 26th, 2016

CBN Orders Banks To Identify, Freeze Accounts Receiving Illicit Capital Flows

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By Idowu John Bakare – The Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMBs) to identify and freeze accounts receiving illicit flows into the country.

CBN also directed the banks to submit the mandate and account details of these account held in Naira or foreign currency to the CBN for onward reporting to security agencies.

Foreign Exchange

In a circular dated August 25, 2016, signed by acting Director, Trade and Exchange Department W.D. Gotring, the apex bank reiterated the need for DMBs to be alive to their responsibilities, “to conduct Know Your Customers Business checks on all their customers to ensure that they do not transact in illegal or illicit flows.”

The CBN, in the circular titled: “Illicit International Money Remittance Through the Banking System” said it has observed that some DMBs are operating accounts either as companies or companies masking to be individuals to transact illegal money flows.

“Further to the guidelines for the operation of International Money Transfer Service (IMTS) in Nigeria referenced TED/FEM/FPC/GEN/01/016 of September 26, 2014, we have observed that some Deposit Money Banks (DMBs) are operating accounts either as companies or companies masking to be individuals for the purpose of illegally receiving money transfer flows into those accounts for onward disbursements to recipients in Nigeria,” the circular read.

“The CBN therefore reiterates that the DMBs have the absolute responsibility to conduct Know Your Customers Business (KYCB) checks on all their customers to ensure that they do not transact in illegal/illicit flows.

“Consequently, DMBs are hereby directed to identify and freeze accounts receiving illicit flows, to submit the mandate and account details of these accounts held in naira or foreign currency,” the circular added.

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