THE 12-year old strategy to reposition the compliance mechanism in the nation’s Deposit Money Banks (DMBs) and empower the Chief Compliance Officers have received new impetus as the Central Bank of Nigeria (CBN) have designated grade levels for the job and directs all affected institutions to comply now.
The policy directive, which is a review of the first circular in 2002, was necessitated by the representations made by banks and the issuance of the new banking model.
The affected institutions include DMBs with international and national authorisation, regional and national license, microfinance banks, Primary Mortgage Banks, bureaux de change, finance companies and development finance institutions.
Sources said the move was also necessitated to give a measure of power to CCOs to make certain decisions devoid of line authorities that may influence their judgement and make them answerable to the boards and chief executive officers.
Already, the apex bank has tied the educational and experience requirements to the “Approved Persons Framework” for all the levels of appointment specified for banks, while additional certifications in International Compliance Association, Certified Anti-Money Laundering Specalists and/or Certified Fraud Examiner.
Accordingly, the revised directive required that CCOs appointed by banks/specialised banks with international authorization and designated as Systematically Important Financial Institution (SIFI) and foreign banks, must not be lower than a General Manager, while banks/specialised ones with national authorization, but not SIFI, can start from the Deputy General Manager.
Also, banks/specialized banks with regional authorization, but not SIFI, merchant banks and discount houses must appoint CCOs with a minimum level of Assistant General Manager, while microfinance banks appoint Head of Compliance for State and National license and Head of Department for Unit license.
For the PMBs, an Assistant General Manager will be appointed for national license operators; Bureau De Change, Operations Manager; Finance Houses, Head of Department; while DFIs like NEXIM, Bank of Industry, Bank of Agriculture, among others, are to appoint CCOs at the grade level of Assistant General Manager.
The Director, Financial Policy and Regulation Department, CBN, Kevin Amugo, however, noted that due to the challenge of having dedicated compliance officers at each branch, the apex bank has given banks the option of cluster structure.
This means that a designated compliance officer would be responsible for a cluster of branches, instead of having one CCOS at each branch.
CBN has already approved the the establishment of Zonal Compliance Officers for banks, who must be on the same level with the management of their banks’ zones where they work.
However, cash centers need not have compliance officers provided the officer that controls the zone effectively performs his functions at those centers.
Where a financial institution decides to operate the cluster structure, details of the arrangement must be made available to the apex bank through the appropriate department.
The structure must take into cognizance the size, number and proximity to each branch, as well as the level of automation of the compliance function without compromise. From The Guardian.