CBN orders banks, fintechs to reveal their real owners in fresh crackdown on financial crime

• CBN has directed banks, fintechs and other financial institutions to disclose their Ultimate Beneficial Owners.

• The move is aimed at combating money laundering, terrorism financing and other financial crimes.

• Financial institutions must identify the real individuals who ultimately own or control their businesses.

• The directive aligns Nigeria's financial sector with international transparency and anti-money laundering standards.

The Central Bank of Nigeria (CBN) has directed banks, fintech companies and other financial institutions to disclose their Ultimate Beneficial Owners (UBOs) as part of efforts to strengthen transparency and curb financial crimes within the country's financial system.

The directive was contained in new regulatory guidelines issued by the apex bank, requiring financial institutions under its supervision to identify, verify and maintain accurate records of individuals who ultimately own, control or benefit from their operations.

The move is aimed at preventing the misuse of corporate structures for money laundering, terrorism financing, corruption, tax evasion and other illicit financial activities.

Under the new rules, financial institutions will be required to look beyond company registration documents and identify the actual individuals who exercise significant control or derive substantial benefits from a business, even where ownership is hidden through multiple companies or nominee arrangements.

The CBN said the guidelines align with global standards on beneficial ownership transparency and are intended to improve accountability within Nigeria's financial sector.

According to the apex bank, institutions must take reasonable steps to determine the natural persons who ultimately own or control a company and ensure that such information remains accurate and up to date.

The regulator noted that hidden ownership structures have increasingly become a concern globally, as they are often used to conceal proceeds of crime, evade regulatory scrutiny and disguise the identities of individuals involved in suspicious transactions.

The new requirements will apply to banks, payment service providers, fintech firms and other regulated entities operating within Nigeria's financial system.

The guidelines are also expected to strengthen Nigeria's anti-money laundering framework and support efforts by regulators to trace the true beneficiaries of financial transactions when investigating cases of fraud or other financial crimes.

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The latest directive forms part of broader efforts by Nigerian authorities to align the country's financial regulations with international best practices and recommendations from global anti-money laundering bodies.

With the new rules, financial institutions are expected to review their ownership records and ensure full compliance with the disclosure requirements set out by the CBN.