In a bid to enhance the identification process within Nigeria’s banking system, the Central Bank of Nigeria (CBN) has issued a new regulation mandating financial institutions to obtain the social media handles of their customers. The directive, which forms part of the CBN’s customer regulation, aims to strengthen the existing identification procedures.
Titled: “Central Bank of Nigeria (Customer Due Diligence) Regulations, 2023,” These rules are meant to help financial institutions better understand and verify their customers.
The regulations aim to ensure that these institutions follow certain guidelines in order to prevent illegal activities and protect the interests of customers. The Central Bank of Nigeria shared this information on its website on Friday.
The new regulation states, in part, that; “By including social media handles as part of the customer identification process, banks seek to gain further insights into customers’ online presence and activities, helping to assess potential risks and monitor for suspicious behavior.
The central bank, in its customer identification section, stated that banks and other financial institutions must figure out who their customers are (whether they are regular or occasional customers, and whether they are individuals or companies or legal agreements).
For individuals, the banks will need the following information: legal name and any other names used (like maiden name), permanent address (complete physical address), residential address (where the customer currently live), telephone number, email address, and social media handle.
The banks will also require customers’ date and place of birth, Bank Verification number, Tax Identification number, nationality, occupation, any public position held, and the name of the customers’ employer.
In the case of corporate entities, CBN said the CDD process entails gathering information such as the institutions’ name, mailing address, email and social media addresses, phone numbers, registration number, registered address, business address, valid identification (e.g., tax identification number), nature and purpose of business or activities, and certified true copies of documents confirming legal existence (e.g., certificate of incorporation), memorandum and articles of association, list of directors and shareholders, among others.
The directive, outlined in the recently unveiled guidelines, seeks to strengthen the existing protocols for verifying the identities of customers.
It has a goal of making sure that financial institutions follow the rules outlined in the Money Laundering (Prevention and Prohibition) Act (MLPPA) of 2022, the Terrorism (Prevention and Prohibition) Act (TPPA) of 2022, the Central Bank of Nigeria (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions) Regulations, 2022 (CBN AML, CFT and CPF Regulations), and international best practices.
These regulations aim to enforce additional measures for customer due diligence to improve compliance by financial institutions.
It also noted that a person needs to have an official ID number, or a unique identifier contained in an unexpired document issued given by the government. This identifier should be a valid document with the person’s name, picture, and signature.
Examples of such documents include a passport, national ID card, residence permit, social security records, or driver’s license.
The financial regulator says that banks and other financial institutions cannot have secret or fake accounts with made-up names.
These rules apply to all financial institutions that fall under the authority of the CBN, which is the main bank mentioned in the document.
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