News Column

CBN Directs Banks to Upgrade Chief Compliance Officers

May 29, 2014

Obinna Chima



The Central Bank of Nigeria (CBN) has directed all Deposit Money Banks (DMBs) and discount houses in the country to ensure that no chief compliance officer (CCO) is below the grade of a general manager without its prior approval.

The central bank stated this in a letter to banks and discount houses titled: "Status and Reporting Line of Chief Compliance Officers of Banks," with reference number: BSD/DIR/GEN/LAB/07/013.

According to the letter signed on behalf of the Director of Banking Supervision by K.O. Balogun, available information had revealed that chief compliance officers of some banks and discount houses are below the grade of general manager without its prior approval. The CBN noted that equally worrisome was the fact that most CCOs do not report directly to the board of directors of their respective institutions. This, it stressed, was a flagrant disregard to extant laws and regulations on the subject.

"For the avoidance of doubt: the CBN circular ref: BSD/2/2002 dated 8th August, 2002 and FPR/DIR/GEN/001/022 dated 18th July 2013 directed that banks and discount houses should designate chief compliance officers, not below the grade of a general manager to, among other things, apply the provisions of the relevant Acts and circulars on money laundering at various levels of their institutions," it stated.

CBN added that "Section 9(1) of the Money Laundering (Prohibition) Act, 2011(as amended) also requires them to designate, at management level, chief compliance officers in their head offices and branches, who have the relevant competence, authority and independence to implement their institutions AML/CFT compliance programme.

"On the basis of the foregoing, the banking sector regulator directed that all deposit money banks and discount houses should ensure that no chief compliance officer in their institutions is below the grade of a general manager without its prior approval.

Also, it stated that such officers should report to the board of directors "with dotted lines to the managing director/chief executive officer without interlocking roles."

Accordingly, the CBN directed that the particulars of all current CCOs with evidence of the CBN approval of same and reporting line should be forwarded to its Director Banking Supervision.

"The CBN also observed with concern the lackluster attendance of CCOs to the monthly meetings of the Committee of Chief Compliance Officers of Banks in Nigeria (CCCOBIN), resulting in the inability of the forum to form the required quorum necessary to take vital decisions pursuant to its mandate. "Going forward, CBN will monitor the attendance by CCOs at the monthly meetings of the CCCOBIN and will not hesitate to take the appropriate regulatory action to stem the unsatisfactory attendance at this important forum," it warned.


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Source: AllAfrica


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