MICROCAPITAL BRIEF: Central Bank of Nigeria Implements 3-Tiered Know-Your-Customer Requirements for Financial Institutions

The Central Bank of Nigeria (CBN), the country’s banking regulator, has introduced a three-tiered set of “Know Your Customer” (KYC) requirements for financial institutions that is intended to improve financial inclusion.

The program introduces unspecified flexibility into the requirements for opening accounts with balances below certain thresholds. The bank has placed caps of NGN 20,000 (USD 127) and NGN 50,000 (USD 317) for single deposits to accounts designated as low- and medium-value, respectively. Balance limits of NGN 200,000 (USD 1,270) and NGN 400,000 (USD 2,540) apply to these accounts.

By Charlotte Newman, Research Associate

About Central Bank of Nigeria (CBN)
The Central Bank of Nigeria (CBN) was established in 1958 as Nigeria’s central banking authority. As defined by the act of parliament that created CBN, its statutory mandates are as follows: “to issue legal tender currency; to maintain external reserves; to safeguard the international value of the legal tender currency; to promote monetary stability and a sound financial system in Nigeria; and to act as banker and financial adviser to the Federal Government.” As of November 2012, CBN reports total assets of NGN 13.3 trillion (USD 82.4 billion).

Sources and Additional Resources:

Central Bank of Nigeria: “Circular to all Banks and Other Financial Institutions: Introduction of Three-Tiered Know Your Customer (KYC) Requirements,” http://www.cenbank.org/Out/2013/CCD/3%20TIERED%20KYC%20REQUIREMENTS.PDF

Central Bank of Nigeria: “Know Your Customer Manual for Banks and Other Financial Institutions in Nigeria,” http://www.cenbank.org/OUT/PUBLICATIONS/BSD/2003/KYCM.PDF

MicroCapital.org story, February 5, 2013, “MICROCAPITAL BRIEF: Smaller Microfinance Branches in Nigeria Want 2 More Years to Raise Capital or Close Branches,” https://www.microcapital.org/microcapital-brief-smaller-microfinance-banks-in-nigeria-want-2-more-years-to-raise-capital-or-close-branches/

MicroCapital.org story, January 28, 2013, “MICROCAPITAL BRIEF: Central Bank of Nigeria Allows States to Set up Microfinance Banks, Supports Entrepreneurship Development Centres in Beneu, Borno, Bross River,” https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-allows-states-to-set-up-microfinance-banks-supports-entrepreneurship-development-centres-in-beneu-borno-cross-river/

MicroCapital Universe Profile: Central Bank of Nigeria
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Central+Bank+of+Nigeria+%28CBN%29

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

Similar Posts: