CBN Regulatory Directives: Week of March 10-16 2026
The Central Bank of Nigeria (the “CBN”) has between March 10-26, issued three directives impacting banks, fintechs, and other financial institutions. The respective circulars carry varying immediate or near-term compliance obligations. Key highlights are set out below.
CIRCULAR 1: Baseline Standards for Automated AML Solutions —AI Now Formally Recognised (Ref: BSD/DIR/PUB/LAB/019/002) March 10, 2026
Summary
The CBN has issued Baseline Standards requiring regulated institutions to deploy automated AML/CFT/CPF systems, formally recognising AI and machine learning for financial crime detection and signalling a shift toward technology-driven compliance.
The standards cover 12 key functions, including transaction monitoring, KYC/KYB, sanctions and PEP screening, fraud detection, case management, audit trails, and data security, with implementation proportionate to institutional size and risk profile. Deposit money banks have 18 months to comply, while other financial institutions have 24 months. All institutions must also submit an implementation roadmap by June 10, 2026.
Institutions classified as High or Above Average risk in their subsectors, as defined by the Baseline Standards, must fully integrate AML systems with KYC/KYB repositories and customer risk profiles, as standalone transaction-feed systems are not acceptable. Noncompliance may result in remedial directives, administrative sanctions, and penalties, including sanctions on institutions and, where applicable, responsible officers and compliance personnel, under the Banks and Other Financial Institutions (BOFIA) Act 2020, the Money Laundering (Prevention and Prohibition) Act 2022, and the CBN AML-CFT-CPF Administrative Sanctions Regulations 2023.
Who It Applies To: All Banks, Mobile Money Operators, International Money Transfer Operators, Other Financial Institutions and Payment Service Providers.
Next Steps to Take
1. Submit implementation roadmap to the CBN Compliance Department by June 10, 2026.
2. Conduct a gap assessment of current AML systems against all 12 functional areas in the Baseline Standards.
3. Notify the relevant CBN supervisory department of all AML solutions currently in use.
4. Institutions rated High or Above Average risk must demonstrate a credible integration roadmap linking AML systems to KYC/KYB repositories.
CIRCULAR 2: Restriction of Banking Services to Non-Performing Large Ticket Obligors (Ref: BSD/DIR/CON/LAB/019/003) March 12, 2026
Summary
According to news outlets, the CBN has directed deposit money banks to stop granting credit facilities and certain banking services, such as letters of credit, performance bonds, bankers’ confirmations, and advance payment guarantees, to large-ticket obligors whose loans are classified as non-performing in the CBN’s credit risk management system (CRMS) or any licensed private credit bureau. Banks must also obtain additional realisable collateral to secure existing exposures. Large-ticket obligors are defined under Clause 3.2(d) of the Prudential Guidelines for Deposit Money Banks as borrowers whose combined exposure across banks exceeds the bank’s Single Obligor Limit, materially affects a bank’s Capital Adequacy Ratio, or otherwise poses systemic risk to the financial system. Non-compliant banks face a fine of up to ₦2,000,000 or licence suspension.
Who It Applies To: All Deposit Money Banks
Next Steps to Take
1. Review loan book against CRMS and private credit bureau records to identify all nonperforming large-ticket obligors.
2. If applicable, suspend approval of any pending/undrawn credit facilities for identified obligors.
3. Initiate discussions on security restructuring with affected obligors.
CIRCULAR 3: Circular to All Banks and Other Financial Institutions (Ref: FPR/DIR/PUB/CIR/001/014) – March 12, 2026
Summary
The CBN has rescinded the requirement under Section 8.0(ii) for customers to provide a sworn affidavit when reactivating dormant accounts. The change is aimed at streamlining the reactivation process while maintaining existing security measures to preserve the integrity of the financial system.
However, the circular provides a carve-out for balances already transferred to the Unclaimed Balances Trust Fund (UBTF) Pool Account. Such balances are no longer subject to standard reactivation procedures and may only be accessed in accordance with the applicable UBTF framework.
All other requirements for dormant account reactivation remain in force.
Who It Applies To: All Banks and Other Financial Institutions
Next Steps to Take
1. Update dormant account reactivation procedures and forms to remove the affidavit requirement.
2. Retrain relevant staff and update customer-facing communications, FAQs, and branch guides accordingly.
3. Ensure all remaining verification and security requirements for reactivation remain fully in place.
4. Publish the list/details of dormant accounts transferred to the UBTF Pool Account in accordance with CBN requirements.
5. Establish internal processes for handling customer claims relating to funds already transferred to the UBTF Pool Account.
