CBN makes terrorism financing supervision a top priority, signals stricter bank checks

The Central Bank of Nigeria has elevated terrorism financing risk to a current supervisory priority, ordering closer checks on how financial institutions monitor and report suspicious transactions. The directive was signed by Hakama Sidi-Ali, acting director of the Corporate Communications and Investor Relations Department, on Tuesday.

In a statement, the CBN said enhanced scrutiny will now cover terrorism financing risk management, transaction monitoring, targeted financial sanctions, and the reporting of suspicious transactions connected to terrorism financing. The bank said it will continue to apply a risk-based approach to ensure compliance with anti-money laundering and counter-terrorism financing rules.

On-site and off-site reviews ahead

The CBN said its supervisory focus will involve both on-site visits and off-site assessments to measure how effective controls are across the financial sector. These checks are in line with existing legal and regulatory obligations.

The bank stated: "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 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."

Domestic and international cooperation

The CBN added that the new supervisory focus supports Nigeria's cooperation with domestic and international partners on counter-terrorism financing, counter-proliferation financing, and broader financial integrity goals. Where necessary, further supervisory engagements will follow as the bank works to strengthen protections around the financial system.

The bank said: "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 announcement comes as Nigerian financial regulators and institutions face growing pressure to ensure the banking system cannot be used to move or conceal funds tied to terrorism or other criminal activities, according to BusinessDay.

What this means for financial institutions

Banks and other financial institutions should expect stricter oversight and more probing examinations of their anti-money laundering controls. The CBN's move signals that compliance with terrorism financing rules is no longer a back-office concern but a frontline supervisory priority for the apex bank. Institutions that fail to strengthen transaction monitoring and sanctions screening now risk regulatory action as the CBN deepens its scrutiny.