CBN Urges Practitioners to Adapt to Emerging Risk

•Halt addition of social media handles to KYC requirements, lawmakers tell apex bank

•To probe excess charges, illegal deductions by banks

Nume Ekeghe in Lagos and Juliet Akoje in Abuja

The Director, Risk Management at the Central Bank of Nigeria (CBN), Dr. Blaise Ijebor has urged risk managers and practitioners to keep up with trends that would pose as risks to their organisation.

Ijebor, gave this charge during the 2023 Certified Risk Manager (CRM) Induction which saw 80 professionals inducted in Lagos, yesterday.

Ijebor’s message to the new inductees emphasised the importance of certain qualities and actions.

He urged them to stay agile and adaptable, ready to respond to the dynamic nature of their work.

He encouraged them to be brave, taking on challenges and seizing opportunities.

Ijebor identified several implications for risk management, which included the rise of interconnected systems, the creation of value from data, the weaponisation of information, shifts in the cybersecurity risk landscape, and regulatory changes.

He said:  “People complain about the changing regulations in the industry but this is necessary because we the regulators contend with new technologies which we have to manage efficiently so that these new technologies do not cause harm in the digital economy.

“Cyber-crime is no longer about money these days. The criminals are now playing a long-term game of boosting their CV and so with each passing day, the cyber-crime racket grows bigger. So risk managers have to adopt new technologies and also adopt management risks as well.”

Earlier in his opening remark, the President, and Chairman of the CRMI Council, Prof. Ezekiel Oseni, while charging the inductees to be well equipped in the field and be the solution that helps to find ways out of business obstacles without compromising their profession, said CRMI was the only chartered risk management institute in Nigeria established by the National Acts of Parliament.

“I will use this opportunity to say that CRMI is the only Chartered risk management Institute in Nigeria established by the National Acts of Parliament. We therefore advise eminent individuals, personalities and members of the public to be aware of institutions not chartered by the Act of National Assembly that are going about as Chartered risk management institutes and conferring fellowship status on people.

“We also want to extend our hands of fellowship to risk management groups and associations that may want to partner with CRMI,” he noted.

Oseni called on the federal government as well as other levels of government to introduce risk management functions in the MDA and other arms of government.

“Effective risk management in governance across the three tiers of government will assist in efficient allocation and utilisation of limited economic resources across the sectors and projects. By embracing effective risk management practices, Nigeria can safeguard its economic stability, attract foreign and domestic investments and foster sustainable growth across all sectors,” he said.

In his special remark, the President, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Ken Opara, said the collaboration between the CIBN and CRM had produced 196 CRMs in the last eight years to effectively address current and emerging risk management issues.

Opara, noted that the induction came at a time the financial landscape was evolving.

He said, “As we celebrate the benefit of digitisation, we must be mindful of cyber security threats. The role of risk managers has therefore become even more crucial in safe-guarding the integrity, security and resilience of our profession. Hence, we must constantly adapt in this digital era and enhance our management practices.”

Meanwhile, the House of Representatives yesterday urged the CBN to halt addition of social media handle on “Know Your Customer (KYC) requirements” in Nigeria.

The House also mandated its Committee on Banking and Currency (when constituted) to investigate the matter and report back within three weeks for further legislative action.

The resolutions followed the adoption of a motion sponsored by Hon. O. K. Chinda, Hon. Laori B. Kwamati, Hon. Kelechi Nwogu, Hon. Ginger Onwusibe, Hon. Mark Essiet, Hon. Abdulsamad Dasuki, Hon. Victor Ogbuzor, Hon. Blessing Amadi and  Hon. Fred Agbedi.

Presenting the motion, Nwogu recalled that the recent directive by the central bank to commercial banks on the addition of social media handles on KYC requirements, thus making it mandatory for commercial banks to comply.

He, however, noted that, “obtaining the additional information, would be useful to financial institutions in accessing customers’ online presence and activities, thus enabling better assessment of potential risks associated with money laundering, terrorism financing and proliferation financing.”

Nwogu said, “as laudable as this directive may appear, may be unnecessary as it is likely to bear pressure on teeming Nigerian masses at trying period. Cognisant of the fact that this directive by the CBN is in conflict with the provision of Section 37 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) on the right to privacy of citizens.

“Also cognisant of the fact that banks in the country already have the names, telephone numbers, passport photographs, emails, National Identification Number (NIN), Biometric Verification Number (BVN), utility bills and other basic requirements with which to identify, know and monitor customers.

“There are better means of monitoring money laundering, terrorism financing, and proliferation financing, such as the Nigeria Police Force (NPF), Nigeria Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission (EFCC), intelligence and crime tracking agencies, amongst others.”

He further stressed that if the directive takes effect, Nigerians who are not on social media, with large turn overs from their businesses and trades, would be compelled to or systematically excluded from formal banking systems with its attendant negative effects and implications.

“Implementing the CBN’s directive at this point may clearly be unnecessary as it is likely to bear a lot pressure on teeming Nigerian masses,” he said.

However, the House also mandated its Committee on Legislative Compliance (when constituted) to ensure implementation.

In the meantime, the House of Representatives yesterday mandated its Committee on Banking and Currency (when constituted) to investigate the issue of excess charges and illegal deductions by commercial banks in Nigeria and to report to back within four weeks for further action.

The resolutions followed the adoption on the need to stop the excessive charges and illegal deductions by commercial banks in Nigeria sponsored by Hon. Godwin Offiono during plenary.

Offiono, alleged that some banks and financial institutions in Nigeria indulge in the unethical practice of fleecing their customers through excess charges and unauthorised deductions.

“Customers of different commercial banks are groaning over excessive charges on their accounts. The financial institutions known as Deposit Money Banks (DMBs) have reportedly introduced different deductions to increase their income, a development that is uncomfortable with customers,” he added.

“Apart from stamp duty, bank customers also pay Value Added Tax (VAT) charges applicable on all VATable transactions in their account.

“Commercial Banks are charging outrageous interest on loans, and overdraft at a rate that is higher than the agreed rate in the offer letter. The arbitrary increase in the interest rate on loans and overdrafts and increase in the other fees without notifying and getting customer’s consent as stipulated in the Central Bank /Chartered Institute of Bankers of Nigeria (CIBN) guideline,” he added.