# CBN Three-Tiered Know Your Customer Requirements

Document ID: CBN_2013_Three_Tiered_KYC_Requirements  
Circular reference: FPR/DIR/CIR/GEN/02/001  
Date: 18 January 2013  
Issuer: Central Bank of Nigeria, Financial Policy and Regulation Department

## Section 1 — Circular scope (Cover page)

The Central Bank of Nigeria introduced three-tiered KYC requirements for banks and other financial institutions to promote financial inclusion. The circular states that the requirements do not preclude financial institutions from adopting stricter controls and transaction restrictions. It refers institutions to the CBN AML/CFT Regulation, 2009 (as amended).

## Section 2 — Risk-based customer due diligence (Pages 1-2)

The framework recognises simplified customer due diligence for lower-risk customers while requiring financial institutions to adopt a risk-based approach. It also requires enhanced monitoring of relevant accounts, customers and identifying third parties, together with regulatory returns described in the circular.

## Section 3 — Level 1 low-value accounts (Page 3)

Level 1 accounts are low-value accounts subject to close monitoring. The historical framework specifies a maximum single deposit of N20,000 and a maximum cumulative balance of N200,000. Basic customer information includes a passport photograph, name, place and date of birth, gender, address and telephone number. International funds transfer is prohibited for these accounts.

## Section 4 — Level 2 medium-value accounts (Page 4)

Level 2 accounts require evidence of basic customer information and verification against official databases. The historical framework specifies a maximum single deposit of N50,000 and a maximum cumulative balance of N400,000. Where cross-checking of a client's identity is not completed at account opening, withdrawal should be denied. These accounts are for transfers within Nigeria only.

## Section 5 — Level 3 high-value accounts (Page 4)

For Level 3 high-value accounts, banks are required to obtain, verify and maintain copies of all required account-opening documents. The account is to be opened at a bank branch in the physical presence of the prospective customer and may be savings or current. No cumulative balance limit is placed on Level 3 accounts. Customers must comply with KYC requirements contained in the CBN AML/CFT Regulation, 2009 (as amended).

## Section 6 — Continuous monitoring and suspicious transactions (Page 5)

The CBN circular requires financial institutions to monitor accounts for suspicious transactions and report suspicious transactions to the Nigerian Financial Intelligence Unit. It requires robust, effective and efficient AML/CFT solutions with screening tools capable of monitoring applicable thresholds. All accounts, regardless of transaction size or risk, must be subjected to continuous suspicious-transaction monitoring. Financial institutions are to designate monitoring officers in their Compliance Departments for consistent and regular monitoring.