CBN Unveils Implementation Strategy for Three-tiered KYC

 CBN Governor, Sanusi Lamido Sanusi

The Central Bank of Nigeria (CBN) Tuesday made public, the implementation strategy for its three tiered Know Your Customer (KYC) policy that was introduced recently.

The apex bank disclosed this in a circular addressed to all banks and Other Financial Institutions (OFIs), dated February 25, 2013, a copy of which was posted on its website.

The document signed by the bank’s Acting Director, Financial Policy and Regulation Department, Mr. I.T. Nwaoha, was titled: “Three Tiered KYC Requirements Implementation Strategy.”

The three tiered KYC was conceived in line with the CBN’s efforts to achieve financial inclusion as well as to reduce the incidence of identity fraud in the system.

“The requirements are such that if you don’t cascade it down and simplify it as the financial requirements becomes less, you will automatically rule out a large segment of Nigerians from the system,” CBN’s Deputy Governor, Operations, Mr. Tunde Lemo, had said in a recent interview.

Continuing, the new circular stated: “The success of the tiered KYC regime would not only promote financial inclusion, but increase the effectiveness of KYC requirements and improve the quality of KYC information obtained by financial institutions from their customers.

“We have, however, observed that the laudable policy would produce lasting result if it is properly implemented and monitored timely from its inception. It is on this note that the implementation strategy was developed by the CBN, in order to ensure its success.”
The document showed that January 18th to March 1, 2013, would be the period for introduction of the policy, while the banking sector watchdog and financial institutions are expected to start creating public awareness on the policy between March 4th to April 15th, 2013.

Similarly, according to the plan, the deployment of required resources on the policy is expected to take place between April 22 and May 31, amongst others.

“The strategy ensures that CBN carries out certain commitment to demonstrate its seriousness to the project and the financial institutions comply with the various provisions of the guidelines and also put in place the required infrastructure,” it added.

However, in a separate circular tagged: “Additional KYC Requirement in Respect of Designated Non-financial Businesses and Professions (DNFBPs),” also signed by Nwaoha, the apex bank announced the extension of the deadline for DNFBPs that are financial institutions’ customers to update their account information with evidence of registration with the Special Control Unit Against Money Laundering (SCUML), by three months.

It explained: “Following representations made by some stakeholders for an extension of the deadline, the CBN hereby extends the deadline by three months from February 1, 2013, to April 30th, 2013.

“For avoidance of doubt, DNFBPs that have not registered with SCUML may do so and update their bank accounts information with such evidence on or before 30th April, 2013, failing which they would not be allowed to operate such accounts until they comply.”