BANK COMPLIANCE OFFICER NOW REPORTS TO THE BOARD

The Central Bank Of Nigeria (CBN) has stripped the chief executive officers (CEOs) of deposit money banks of direct personal responsibility for bank compliance with all regulations and directives from the apex bank unless they are also appointed as executive compliance officers (ECOs).

According to a circular to the DMBs signed by I R Yusuf for Director Financial Policy and Regulation dated September 28, the banks are now to appoint an executive compliance officer (ECO) not below the rank of executive director to whom chief compliance officer (CCO) will report.

Until now, the DMBs had only CCOs who must be not below the rank of a general manager and in the new dispensation, the ECO will report directly to the Board of directors on compliance matters.

Besides, says the CBN, the ECOs will be the ones the CBN will now hold responsible for all compliance matters when there is a breach.

Consequently, all DMBs have been asked to send to the CBN not later than October 10, the name and curriculum vitae of the new ECO for the approval of the apex bank.

The circular explained:

"In an attempt to ensure strict compliance with all extant regulations particularly those relating to foreign exchange transactions, financial action task force (FATF) and anti-money laundering/combating financing of terrorism (AML/CFT), the CBN decided to enhance the minimum qualification for the chief compliance officer of deposit money banks..".

ECOs, adds the circular, are allowed to combine other duties with the compliance responsibility but no CCO is allowed to take on any other responsibility.

In other words, should a DMB opt to make its CEO the new ECO as well, there will be no harm. Otherwise, any ECO who is not also the CEO will report directly to the Board of Directors and, in particular, the CBN on compliance issues.

However, can this lead to two command posts within the same DMB?

Well, the risk exists in the new dispensation but it is hoped that all will go well so long as compliance is not negotiable or subject to other interests.

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