Nigeria Central Bank Releases Watchlist On Financial Crimes

      In order to address the rising cases of crimes in the financial system, the Central Bank of Nigeria (CBN), in collaboration with the Nigeria Inter-Bank Settlement System (NIBSS), has come up with a draft framework on local Watch-list for the banking system.
In a circular, entitled “Exposure draft of the proposed framework on watch-list for the Nigerian banking system”,  by its Director of Banking Supervision, Mrs Tokunbo Martins, the apex bank says the aim of the watch list is to “address the increasing incidence of fraud/forgeries and other unethical practices” with the aim of “engendering the needed public confidence that will ensure a safe and sound financial system”.
According to Mrs Martins, the “Watch-list is a database of bank customers identified by their Bank Verification Numbers (BVNs) who have been involved in confirmed fraudulent activities.”
On how the database will be managed, she says the “database will be hosted by NIBSS. In this regard, the attached draft framework has been developed to provide guideline for the operation of the Watch-List to manage fraud in the system.”
The draft framework lists fraudulent transactions as forgery, compromise, complicity, fraudulent duplicate enrolment and any fraudulent infraction without monetary amount involved.
It also lists “confirmed successful and unsuccessful fraud attempts within the range of N1 to N50 million and above.”
The watch-list stakeholders include CBN, Bankers’ Committee, banks/Other Financial Institutions, NIBSS , law enforcement agencies and  bank customers , with  responsibilities asigned to each.
For instance, it spells out the responsibilities of the bank to “render returns to NIBSS on individuals involved in confirmed fraudulent activities; delistindividuals from the watch-list using the watch-list report duly endorsed by the MD/CEO of the bank to delist individuals/entities after obtaining clearance from law enforcement agencies.”Other proposed roles of the banks are, Integrating the banking system to the watch list database, for online identification/verification of watch-listed individuals as transactions occur;  Enforcing the appropriate sanctions on customers as stipulated by CBN and banks to update the terms and conditions of account opening package with the following clause for new accounts and communicate the update to existing customers.
“If a potential fraud is found in the operation of your account or you are reported, you agree that we have the right to apply restrictions to your account and report to appropriate law enforcement agencies.”
As for the NIBSS, the draft stipulates that “NIBSS shall maintain the Watch-list database on behalf of stakeholders and shall be responsible for the use of the watch-list report submitted by banks to add reported fraudulent individuals to the watch-list database; Use the watch-list report submitted by banks duly endorsed by the MD/CEO of the bank with the clearance from law enforcement agency to delist individual from the watch-list database; Provide banks with a portal for the verification of watch-list individuals indicating the categories of fraud; Provide Application Programme Interface (API) for banks to integrate their systems to the watch-list database for online verification of watch-listed individual at transaction time;  Keep audit trail of all user activities on the watch-list database to be able to determine the addition of an earlier delisted individual from the database  and that NIBSS shall put in place a Service Level Agreement (SLA) with relevant stakeholders.