The Central Bank of Nigeria (CBN) has issued new guidelines for use by individuals and entities applying for licence to operate as banks or other financial institutions in the country.
The latest guidelines, issued by the CBN under the auspices of the Anti-Money Laundering, Combating The Financing of Terrorism, and Countering Proliferation Financing of Weapons of Mass Destruction (AML/CFT/CPF), aim to assist promoters of financial institutions to comply with AML/CFT/CPF requirements while applying for operational licences.
The guidelines, which makes application process for banking licences to take into consideration terror financing, weapons financing, and other insecurity, also provide specified minimum requirements and are expected to be considered by anyone applying for licenses shall.
The CBN further stated that while the guidelines provide for items such as objectives, scope, and applicability, requirements for licence application, of interest in its assessment are grounds for rejecting applications for a banking licence.
It listed some of the basis for rejecting applications as failure to demonstrate understanding of the ML/TF/PF risks inherent in the business; inability to address the AML/CFT/CPF licensing requirements satisfactorily, especially during the capital verification exercise; and misrepresentation of facts and false declaration.
Others include, criminal record of a party to the application indicating conviction or any other offence that constitutes financial crime; opaque ownership structure; and discovery that a party to the application is on the sanctions lists of United Nations Security Council (“UNSC”); United States Office of Foreign Assets Control (“OFAC”); and Her Majesty’s Treasury, United Kingdom (“HMT”).
The CBN stated that other bodies whose sanctions may lead to its refusal to grant licence to an applicant are European Union (“EU”); French Ministry of Economy, Finance and Industry (MINEFI); the Nigerian sanctions list; and any other sanctions list as may be advised from time to time.
Also, the apex bank stated that inability to address observed deficiencies in licensing application within specified timeline as well as any other condition that it may specify may also serve as basis for its rejecting applications.
