Banks and other financial institutions in Nigeria are facing tighter checks from the Central Bank of Nigeria (CBN) over terrorism financing, with the regulator placing transaction monitoring and suspicious transaction reporting among its current supervisory priorities. The action was disclosed by the apex bank on Tuesday as part of measures to prevent the financial system from being used to support illicit activities.
The CBN said its supervision would focus on how financial institutions manage terrorism financing risks, monitor transactions, report suspicious activities and apply targeted financial sanctions.
The bank disclosed this in a press statement signed by Hakama Sidi-Ali, Acting Director of its Corporate Communications and Investor Relations Department.
“The Central Bank of Nigeria has elevated terrorism financing supervision to a current supervisory priority, as part of its ongoing commitment to protecting the Nigerian financial system from abuse by illicit actors,” the bank said.
Banks face closer checks on financial activity
The new supervisory focus places greater responsibility on banks and other regulated institutions to identify unusual transactions and comply with existing rules against financial crimes.
The CBN listed four areas for its supervisory work: terrorism financing risk management, transaction monitoring, targeted financial sanctions and suspicious transaction reporting.
Financial institutions are required under existing regulatory rules to monitor customer activities and report transactions that may indicate financial crimes. The new focus means these systems will receive closer regulatory examination.
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The regulator said it would use both physical examinations and off-site monitoring. This approach allows the CBN to examine institutions directly and also review their activities from outside their premises.
“The bank will continue to apply a risk-based supervisory approach, including on-site and off-site engagement, to support effective AML/CFT/CPF controls across the financial sector in line with existing legal and regulatory obligations,” the statement read.
AML/CFT/CPF refers to measures against money laundering, terrorism financing and proliferation financing.
The risk-based system allows supervision to give greater scrutiny to institutions, customers, transactions or activities considered to present higher financial crime risks.
Sanctions and suspicious transactions under scrutiny
The CBN’s focus also covers targeted financial sanctions. Such sanctions are used to stop designated individuals and organisations from accessing or transferring money through the formal financial system.
This issue had already featured in a June directive from the regulator. On 25 June, NEW DAILY PRIME reported that the CBN instructed banks and other financial institutions to immediately freeze accounts and assets belonging to individuals and companies designated for terrorism and terrorism financing.
The directive was contained in a 24 June, 2026 circular from the CBN Compliance Department. It was sent to banks, Payment Service Banks and other financial institutions regulated under the Banks and Other Financial Institutions Act 2020.
The circular followed sanctions issued by the Nigeria Sanctions Committee and the United States Department of the Treasury’s Office of Foreign Assets Control under Executive Order 13224, as amended.
The CBN’s current supervisory priority involves both the detection of suspicious financial activity and compliance with sanctions affecting designated persons and entities.
The bank said the focus also supports Nigeria’s domestic and international cooperation against terrorism financing, proliferation financing and threats to financial integrity.
“This supervisory focus also supports Nigeria’s ongoing domestic and international cooperation on counter-terrorism financing, counter-proliferation financing, financial integrity, and the protection of the financial system,” the bank said.
The regulator said further supervisory engagements would be undertaken where necessary.
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