The Central Bank of Nigeria (CBN) has said penalties totaling N15 billion were imposed on 29 banks for violations of Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.
This was disclosed by Olayemi Cardoso, CBN governor, during the 2024 Bankers’ Night organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
In his remarks, Cardoso stressed the gravity of these violations and stressed the need for the affected banks to address the systemic weaknesses that allowed such lapses to occur.
“In addition to these penalties, the banks are required to address the root causes of the lapses, which is crucial for improving regulatory effectiveness. Historically, the industry has struggled with recurring issues, but we are confident that this approach will help change that narrative,” Cardoso stated.
The Broader Implications of Compliance
The CBN governor highlighted the broader impact of compliance on the financial ecosystem, noting that institutions that prioritise regulatory adherence contribute to national growth and stability.
“A bank that prioritises compliance does more than protect itself -it strengthens the entire financial ecosystem. It directs financial resources toward growth, innovation, and prosperity rather than crime and corruption. Together, we must exceed standards, demonstrating to the public and the world that we are stewards of integrity and trust,” he added.
Cardoso also pointed out that the consequences of non-compliance extend beyond regulatory penalties. According to him, issues such as money laundering, fraud, and corruption undermine the foundation of the financial system. “The cost of inaction is profound—fraud undermines confidence, corruption erodes trust, and money laundering perpetuates organized crime,” he remarked.
A Vision for a Culture of Compliance
The governor articulated a vision for a robust compliance culture across Nigeria’s banking industry. He emphasised that financial institutions must not only comply with regulatory standards but also adopt a proactive approach to identifying and mitigating risks.
Cardoso explained that executives and boards must lead by example by making compliance a strategic priority and championing zero tolerance for breaches—not just in policy but in practice. He urged financial institutions to anticipate vulnerabilities and address risks in high-risk areas proactively.
He also called for the education of staff to recognise red flags and report concerns about fraud, money laundering, or unethical behavior, ensuring they are protected when they do so.
Additionally, he stressed the importance of conducting enhanced due diligence for high-risk clients, politically exposed persons, and vendors to prevent illicit funds from flowing through financial institutions.
The governor emphasised the need for industry-wide collaboration to combat systemic threats. This includes sharing intelligence on emerging risks, cooperating with law enforcement agencies, and maintaining open communication with regulators.
Challenges Facing the Sector
Cardoso acknowledged the challenges facing the sector, from cybersecurity threats to disparities in financial inclusion. However, he expressed optimism that with strengthened compliance frameworks, the Nigerian banking industry could address these challenges effectively.
Reflecting on the broader implications, he said, “Compliance is not just a regulatory requirement; it is central to our mission of fostering trust and integrity within the financial system. Together, we can build an industry that not only meets but exceeds global standards.”
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