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Nigeria’s Central Bank releases new guidelines for licensing of banks and other financial institutions

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The Central Bank of Nigeria (CBN), on Wednesday, November 23, 2022, released a circular (PDF) detailing additional requirements for the granting of licenses to banks and other financial institutions. They also complement existing requirements for the issuing of these licenses. 

In a statement signed by the Director, Financial Policy and Regulation Department, Chibuzor Efobi, the bank stated that the latest guidelines cover new and pending licensing applications. Furthermore, he noted that this update should be read in addition to existing regulatory requirements covering Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Countering Proliferation Financing (CPF). 

The new guidelines detail the requirements for individuals and organisations applying for licences and possible reasons for rejecting their applications. Promoters of financial institutions, defined as persons involved in setting up and funding financial institutions, must submit a completed and personally signed Beneficial Owners Declaration Form and a notarised statement of net worth for all beneficial owners. 

Other requirements include the organisation’s AML, CFT, and CPF compliance policy covering its plans to train the board, management, and staff. There would also be a compliance structure that covers the compliance officer’s designation and status. 

The guideline also lists the conditions for denying a licence application, including an opaque ownership structure and mentions on any sanctions list such as the European Union sanctions list, United Nations Security Council, or the Nigerian sanctions list. 

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