The Central Bank of Nigeria (CBN) has elevated terrorism-financing oversight to a current supervisory priority, signalling tougher scrutiny of how banks and other regulated financial institutions identify and respond to transactions that could support illicit activities.
The apex bank announced the move on Tuesday, September 8, 2026, as part of its efforts to prevent Nigeria’s financial system from being exploited by individuals or organisations involved in terrorism financing and other financial crimes.
In a statement signed by its Acting Director of Corporate Communications and Investor Relations, Hakama Sidi-Ali, the CBN said its intensified supervision would focus on institutions’ management of terrorism-financing risks, transaction-monitoring systems, targeted financial sanctions and the reporting of suspicious transactions.
The regulator said it would use both on-site examinations and off-site monitoring under a risk-based supervisory framework to assess compliance with anti-money laundering, counter-financing of terrorism and counter-proliferation financing requirements.
Four Areas Now Under Increased CBN Scrutiny
The latest supervisory emphasis puts particular attention on four areas that financial institutions must manage effectively:
- Terrorism-financing risk management — institutions must identify and assess vulnerabilities that could expose their systems to illicit financing.
- Transaction monitoring — banks and other regulated entities are expected to maintain systems capable of detecting unusual or potentially suspicious activity.
- Targeted financial sanctions — institutions must implement applicable restrictions against designated individuals and entities.
- Suspicious transaction reporting — potentially illicit transactions must be identified and reported through the appropriate regulatory channels.
The CBN said the enhanced monitoring would remain within existing legal and regulatory requirements.
Rather than applying identical scrutiny across the financial sector, the regulator’s risk-based approach allows supervisory attention to be concentrated on institutions, products, services or transactions considered more vulnerable to money laundering, terrorism financing or proliferation financing.
That approach is consistent with recommendations contained in the CBN’s risk-assessment work, which called for stronger AML/CFT/CPF supervision, particularly for higher-risk institutions and financial subsectors.
The announcement places compliance systems at the centre of the CBN’s latest financial-integrity drive.
Banks, payment service providers and other regulated institutions will need effective procedures for identifying customers and transactions that present heightened risks, monitoring financial activity and escalating suspicious transactions.
The regulator’s use of on-site and off-site supervision also means institutions can expect scrutiny through more than routine reporting.
On-site examinations can allow supervisors to examine compliance systems and controls directly, while off-site monitoring enables regulators to assess information submitted by financial institutions and identify areas requiring further attention.
The CBN has previously identified vulnerabilities within parts of Nigeria’s financial sector and recommended stronger supervisory intervention, improved compliance training and better monitoring of higher-risk institutions.
The latest announcement therefore represents an intensification of an existing regulatory direction rather than an entirely new framework.
Terrorism financing controls are designed to prevent legitimate financial channels from being used to raise, move, store or make funds available for terrorist activities.
For regulators, the challenge extends beyond identifying obvious transactions. Illicit funds can potentially move through legitimate businesses, financial accounts, payment systems and other channels before being diverted to prohibited purposes.
This is why the CBN’s emphasis on transaction monitoring and suspicious-transaction reporting is significant.
The regulator is also linking its supervisory programme to Nigeria’s domestic and international cooperation on counter-terrorism financing and counter-proliferation financing.
The objective is broader than protecting individual banks. Effective controls help protect the integrity and reputation of Nigeria’s financial system and strengthen cooperation with international financial-crime authorities.
The apex bank said its intensified supervisory focus would support efforts to strengthen financial integrity and protect the financial system from illicit activity.
The CBN also indicated that additional supervisory engagements would be undertaken where necessary, suggesting that the latest announcement could be followed by further examinations or regulatory interventions.
The development is particularly important for financial institutions because weaknesses in compliance controls can expose them to regulatory, operational and reputational risks.
The CBN’s existing risk-assessment framework has already called for continued improvement in AML/CFT/CPF supervision and periodic reviews of money-laundering, terrorism-financing and proliferation-financing risks.
The immediate implication is increased regulatory attention on how financial institutions prevent their platforms from being misused for terrorism financing.
The CBN is expected to continue using risk-based supervision to identify weaknesses and determine where additional regulatory engagement is required.
For banks and other regulated institutions, the focus will be on demonstrating that their systems can:
- identify terrorism-financing risks;
- monitor transactions effectively;
- implement applicable financial sanctions;
- detect and escalate suspicious activity; and
- maintain effective AML/CFT/CPF controls.
The CBN’s latest position reinforces Nigeria’s broader effort to strengthen financial safeguards against illicit finance. Its effectiveness will ultimately depend not only on regulatory supervision but also on how quickly financial institutions identify weaknesses and act on them.
