CBN warns banks on illicit money transfer flows

The Central Bank of Nigeria (CBN) has directed commercial banks to conduct Know Your Customers’ Businesses (KYCB) to ensure customers do not transact illegal or illicit remittances through the banking industry.


The CBN gave the directive to authorised dealers, mainly banks, on Friday in a circular signed by the Acting Director of Trade And Exchange Department, Mr W.D Gotring and titled, “Illicit international money remittances through the banking system’’.

The apex bank had observed that some Deposit Money Banks (DMBs) were operating accounts either as companies or masking themselves as individuals for the purpose of illegally receiving money transfer flow.

They then claimed to onward disburse such funds to recipients in the country.

The CBN had directed the commercial banks to identify and freeze those accounts receiving illicit flows.

It also directed them to submit mandate and account details of such accounts held in foreign and local currencies to the CBN.

The apex bank said that the development would allow easy onward reporting to the security agencies.

The News Agency of Nigeria (NAN) recalls that in July, the CBN lifted the ban on sales of foreign currency proceeds of International Money Transfers to bureaux de change operators.

The apex bank said that the lift would ensure the stability of the exchange rate and boost participation of all critical stakeholders in the foreign exchange market.

It directed all authorised dealers who were agents to approve International Money Transfer Operators (IMTOs) to sell foreign currency accruing from inward money remittances to licensed BDCs with immediate effect.

The bank said IMTOs were required to remit foreign currency to the agent banks for disbursement in Naira to the beneficiaries while the foreign currency proceeds shall be sold to the BDCs.

To ensure the success of the policy, CBN later certified only three international money transfer firms- Western Union, MoneyGram and Ria.