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CBN Test Reveals Loopholes in Banks’ Anti-money Laundering System



  • CBN Test Reveals Loopholes in Banks’ Anti-money Laundering System

Majority of the Deposit Money Banks in the country failed an anti-money laundering system examination conducted by the Central Bank of Nigeria, a report by the CBN has revealed.

According to the 2017 CBN Half-year Economic Report, the anti-money laundering systems in place in majority of the commercial banks fail to meet a number of compliance requirements specified by the apex bank.

It was learnt that many banks failed to conduct enhanced due diligence, a major compliance requirement, on some high-risk customers, while collation and reporting of foreign currency transactions and suspicious transactions were not fully automated in some banks.

The CBN report read in part, “The CBN conducted an anti-money laundering/combating terrorism financing compliance examination of 25 reporting banks. The examination was guided by the statutory provisions of the Money Laundering Prohibition Act, 2011 (as amended), the CBN’s AML/CFT Regulations, 2013 and recommendations of the Financial Action Task Force.

“The exercise revealed a number of shortcomings in the following areas: Customer due diligence: copies of identification documents such as international passports and national identification cards were not in some customer’s files, while enhanced due diligence was either not conducted or inadequately conducted on high-risk customers.

“The AML/CFT Reporting software: Collation and reporting of foreign currency transactions, currency transaction reports and suspicious transaction reports were not fully automated in some banks. Similarly, the AML/CFT software in some banks had not been subjected to independent testing to determine their efficacy, thereby exacerbating the risk of under reporting.’’

According to the report, the AML/CFT manuals/programmes in some banks do not highlight policies to address specific issues such as shell banks and evaluation of new technologies for the AML/CFT risks, among others.

“Regarding the audit of the AML/CFT function, there were instances of inadequate internal control oversight over the compliance function as recommended by the FATF and required by the CBN AML/CFT regulations,” the report added.

It added that the number of registered borrowers (individual and corporate) in the nation’s banking system had increased by 322 per cent to 824,387, from 195,159 customers previously.

This followed the redesigning of the credit risk management system database of the banking industry.

The report stated, “At end-June 2017, the number of registered borrowers in the CRMS database was 824,387, compared with 195,159 in the corresponding period of 2016. The significant rise was due to increased enforcement and the capture of all loans, regardless of amount, as against only loans of N1.0m and above. There were 755,076 individuals and 69,311 corporate borrowers at end-June 2017.

“Similarly, the number of borrowers with outstanding facilities rose significantly to 1,105,671 at end-June 2017, compared with 104,126 and 93,168 at end-December 2016 and end-June 2016, respectively.

“Following the issuance of stricter guidelines, improved compliance by banks and the capture of historical data on hitherto unreported credit, the total number of credit facilities on the database rose to 1,905,997, compared with 181,987 at end-December 2016 and 173,050 at end-June 2016, respectively. The number comprised 1,513,452 individual and 392,545 corporate borrowers.”

The report also revealed that the first of the bi-annual reviews of the foreign exchange activities of 25 banks (21 commercial and four merchant banks) was conducted in April 2017 to ascertain the level of compliance with extant foreign exchange laws and regulations.

The review covered foreign exchange operations for the period, October 1, 2016 to March 31, 2017.

According to the CBN, major infractions observed included non-compliance with regulations, such as the concessionary rates specifically provided for utilisation of funds sourced from the Secondary Market Intervention Sales foreign exchange window; and non-issuance of certificates of capital importation to beneficiaries within the allowable time of 24 hours post receipt of funds.

Others were non-repatriation of export proceeds within the regulated time frame; incorrect rendition of returns to the CBN; non-compliance with approved net foreign currency trading limit positions; and lapses in foreign trade documentation.

The CBN said the reports of the examinations were being finalised for appropriate actions in line with the extant laws and regulations.

It added that it conducted several ad hoc investigations in the review period. The reports of the exercise were provided as input to the policy development process.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market.

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Remove Face Mask When Using ATM, Banks Tell Customers



face mask

Face Mask May Cause ATM Transaction Failure, Banks Tell Customers

Deposit Money Banks have said due to their face recognition technology, customers wearing face masks may experience service failure while using the Automated Teller Machines (ATMs).

In an email issued to customers by Fidelity Bank, the bank said why the use of face masks is important to curb the spread of COVID-19 pandemic, customers should remove when performing ATM transactions.

The bank said “Wearing of face masks is a safety and precautionary measure we must all adhere to in this period of the COVID-19 pandemic.

“However, we advise that you remove your face mask while making withdrawals or carrying out ATM transactions to allow our ATM properly recognise you.

“Fidelity Bank ATM machines have face detection features installed to curb incidences of fraudulent ATM withdrawals.

“Consequently, you may not be able to carry out any transaction if our ATMs are not able to properly recognise you. We apologise for the inconvenience that this may cause you.”

Meanwhile, Guaranty Trust Bank plc continues to ease accessibility for all customers and advised customers to protect themselves.

GTBank said, “When visiting any of our branches, kindly protect yourself by wearing a face mask at all times. It is also very important that you keep a safe distance when in a queue inside or outside the branch.

“Before visiting any of our branches, please remember that you can withdraw up to N150,000 at all our ATMs and that you can do most of your banking from the safety of your home.”

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Access Bank in Talks to Acquire Cavmont Bank



Access bank

Access Bank to Acquire Cavmont Bank in Zambia

Access Bank Plc on Wednesday announced that its wholly-owned subsidiary in Zambia, Access Bank Zambia Limited (Access Bank Zambia) is in talks to acquire Cavmont Bank Limited, a subsidiary of Cavmont Capital.

According to the statement signed by Mr. Sunday Ekwochi, Company Secretary, Access Bank and released on the Nigerian Stock Exchange website on Wednesday, the ongoing discussions is to acquire 100 percent of Cavmont Capital’s interest in Cavmont Bank.

However, the lender said “there can be no certainty that a transaction will be agreed, nor as to the terms of any such agreement.

“The completion of a transaction would be subject to formal regulatory approvals. Access Bank will be updating the market as appropriate and in accordance with its disclosure obligations.”

The lender, therefore, advised shareholders to exercise caution when dealing in Access Bank’s securities.

Investors King Ltd note: This announcement further threw more lights on the recent purchases of Access Bank’s shares by Herbert Wigwe, the Chief Executive Officer and Managing Director, Access Bank.

The CEO/MD purchased 7.532 million of Access Bank‘s shares in the last one month.

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Mohammed Umar is the New Acting Chairman of EFCC




Buhari Appoints Mohammed Umar as EFCC Acting Chairman

President Muhammadu Buhari has appointed, Mohammed Umar, the director of operations at the Economic and Financial Crimes Commission (EFCC), as the new Acting Chairman of the agency, according to the NAN.

A top official of the commission confirmed to NAN that Umar has taken charge of the agency following the suspension of Ibrahim Magu, the former acting Chairman.

Ibrahim Magu was suspended by the President on Tuesday following series of allegations bordering on frauds, financial misappropriations and abuse of power.


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