The Central Bank of Nigeria (CBN) has issued a strong reminder to banks, payment service banks, and fintech companies on the need to reinforce their sanctions compliance frameworks or risk regulatory sanctions.
In a letter dated April 17, 2025, and signed by Amonia Opusunju for the Director of the Compliance Department, the CBN directed all financial institutions to ensure strict adherence to sanctions lists maintained at both international and national levels.
These include the United Nations Consolidated Sanctions List, the Nigerian Sanctions List in line with the Terrorism (Prevention and Prohibition) Act 2022, and guidelines on targeted financial sanctions related to terrorism and its financing.
According to the apex bank, financial institutions are expected to regularly update their systems to identify designated persons or entities and prevent the misuse of financial platforms to facilitate illegal transactions.
“Financial Institutions are required to maintain a robust and dynamic sanctions compliance framework that enables them to Identify and respond promptly to updates or changes across all applicable sanctions lists; Prevent the use of their systems and platforms for transactions involving designated individuals or entities; Conduct real-time screening of customers, transactions, and beneficial owners; and File appropriate reports with the Nigerian Financial Intelligence Unit (NFIU) and notify the CBN, where necessary,” the letter read.
The CBN’s directive also covers real-time screening of customers, transactions, and beneficial owners. Where necessary, institutions are to report suspicious activities to the Nigerian Financial Intelligence Unit (NFIU) and notify the apex bank.
Non-compliance could trigger sanctions, says CBN
The regulator stressed that failure to meet these obligations could lead to enforcement actions or regulatory penalties. It added that sanctions compliance frameworks must be periodically reviewed and aligned with prevailing laws and regulatory expectations.
The reminder, which comes amid increased global attention to financial crime risks, sends a clear message that compliance is non-negotiable.
It also reflects Nigeria’s efforts to improve its standing with international financial watchdogs such as the Financial Action Task Force (FATF), especially in areas like anti-money laundering (AML) and combating the financing of terrorism (CFT).
For fintech companies and other emerging players in the financial ecosystem, the CBN’s warning emphasises the need to integrate compliance mechanisms into their technology stacks and customer onboarding processes.
In its concluding remarks, the CBN advised all financial institutions to take note of the guidance and act accordingly.
“This letter serves as a regulatory reminder and all Financial Institutions are expected to ensure continued compliance with applicable laws and CBN directives,” the apex bank stated.
What this means
This reminder puts financial institutions on high alert and reinforces the CBN’s commitment to strengthening the integrity of Nigeria’s financial system.
- With increasing regulatory pressure, banks and fintechs will now need to prioritise the upgrade of their compliance systems and invest more in tools for sanctions screening, transaction monitoring, and reporting.
- It also signals that the CBN is likely to intensify supervision in this area, with possible audits or sanctions for institutions found wanting.
- For new entrants and smaller fintech players, the directive serves as a warning that regulatory compliance is just as critical as innovation in Nigeria’s financial services landscape.
