1. Findings of the Banking Sector Vulnerability Assessment
PRESENTATION OF DRAFT FINDINGS OF THE BANKING SECTOR VULNERABILITY ASSESSMENT
Findings of the Banking Sector Vulnerability Assessment
Eko Hotel, Lagos
14th – 16th June, 2016

2. Outline Introduction Findings Challenges Conclusion
Overview of Banking Sector
Objective of WG3
Methodology
Findings
Variable ratings
Overall sector vulnerability, Risk and Justification
Priority Areas
Challenges
Conclusion

3. Introduction
The Nigerian banking sector is regulated by the Central Bank of Nigeria (CBN) and it accounted for more than 95% of the financial system assets at the end of 2014.

4. Introduction
The comprises of 23 licensed banks as at end December 2014 with the following composition
19 deposit money banks (DMBs) and
1 non interest bank (NIB) and
3 Merchant Banks (MB) with
3 Financial Holding Companies (FHC).

5. Objectives of WG 3
Identify the overall vulnerability of the banking sector
Identify bank products/services/channels with high vulnerability
Prioritize action plans that will strengthen anti-money laundering controls (AML controls) in the banking sector.

6. Methodology Assessment was based on two broad variable types.
The general input variables which assess the entire banking sector and
The input variables specific to particular products offered by the banks
The following methodologies were adopted:
Primary Source (Questionnaires and Interviews)
Secondary Source (Annual reports & other publications)

7. Input Variables Rating

8. Product Specific Vulnerability

9. Overall Sector Vulnerability
The overall banking sector vulnerability to ML risk is rated Medium High with a score of 0.74.
Due to weaknesses in general AML control variables.

11. Overall Sector Vulnerability
Specifically due to the weaknesses and deficiencies in quality of banks operations which occurred as a result of weakness in:

12. Overall Sector Vulnerability
Quality of CDD framework composed of (0.3):
Availability and access to beneficial ownership information – Low (0.3)
Availability of reliable identification infrastructure – low (0.3)
Availability of independent information sources- Low (0.3)

13. Priority Ranking

14. Conclusion
The CBN should take steps to improve the quality of AML supervision.
NFIU to ensure measures are taken to amend the MLPA to provide for the gaps and deficiencies observed during the assessment such as:
Administrative sanction regime to be more proportionate & dissuasive
Legal provision for the protection of the office of the CCOs
Tipping off

15. Conclusion
The CAMA should be amended to include a legal provision for the disclosure of beneficial ownership information by public companies.
Adequate funding for the NIMC
Adequate funding for the NFIU
The NFIU should coordinate the process that would ensure the maintenance of data by relevant MDAs in the required format for future risks assessments.

16. THANK YOU