Why CBN wants your social media details and all you need to know about the new KYC policy

Nigeria, like many other countries, faces significant challenges in combating illicit activities such as money laundering, and terrorism financing. These criminal activities not only pose threats to national security but also hinder economic development and undermine the integrity of the financial system.

In line with the Money Laundering (Prevention and Prohibition) Act signed by former President Muhammadu Buhari in 2022, the Central Bank of Nigeria (CBN), in its Customer Due Diligence Regulations of 2023, is mandating financial institutions in the country to request details of social media accounts from their customers as part of Know Your Customer (KYC) requirements.

Money laundering, the process of concealing the origins of illegally obtained funds to make them appear legitimate, has been a disturbing issue in Nigeria over the years.

In 2021, Abdulrasheed Maina, former chairperson of the defunct Pension Reform Task Team (PRTT), was jailed after Justice Okon Abang found him guilty of 12 counts of money laundering filed against him by the Economic and Financial Crimes Commission (EFCC). In 2022, during the heat of the 2023 presidential campaigns, Doyin Okupe, the then Director-General of the Presidential Campaign Council (PCC) of the Labour Party (LP), was found guilty of contravening sections 16(1) and (2) of the Money Laundering Act and was sentenced to two years in prison. While he was bailed, Okupe resigned as Peter Obi’s campaign DG.

As part of Customer Due Diligence, which requires banks and other financial institutions to know their customers better, the apex bank has included providing social media details as a measure of customer identification and verification.

Section 6(a) (iv) of the directives released on, June 23, 2023, states that banks are to request “telephone numbers, email addresses, and social media handles” from their customers, whether permanent or occasional.

The new policy, however, generated mixed reactions among citizens with many arguing that it’s an attempt to invade the privacy of customers.

Socio-Economic Rights and Accountability Project (SERAP), a social rights advocacy group in Nigeria, has asked the CBN to withdraw the circular containing the new policy or face litigation.

“The CBN regulations and directive to banks to obtain details of customers’ social media addresses violate Nigerians’ rights to freedom of expression and privacy. It is inconsistent and incompatible with the rule of law,” said Kolawole Oluwadare, SERAP deputy director, in a letter dated June 24, 2023.

“The purported mandatory requirement would inhibit Nigerians from freely exercising their human rights online. If obtained, such information may also be misused for political and other unlawful purposes.” Oluwadare added that “SERAP shall take all appropriate legal actions to compel you and the CBN to comply with our request in the public interest” if the new policy is not revised within three days.

But with the growing cases of online scams, where America lost $10.3 billion to internet scams in 2022 alone, some companies, and employers, including some embassies like the US, are requesting social media details from people.

However, Ayotunde Bally, a financial expert and the Chief Executive Officer of Arvofinance, also faulted the new CBN directive.

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“Social media handles reveal a customer’s true identity and make it easier for fraudsters to carry out fraudulent activities. While BVN, National Identity Number, and Tax Identity Number provide an extra layer of security, social media handles break down that layer and increase the risk of bank fraud,” he told News Agency of Nigeria (NAN) on June 27, 2023.

On July 11, 2023, the House of Representatives raised a motion to halt the implementation of the KYC.

In the motion sponsored by Kingsley Chinda, Laori Kwamati, Ginger Onwusibe, Mark Essiet, Abdulsamad Dasuki, Victor Ogbuzor, Blessing Amadi, Fred Agbedi, and Kelechi Nwogu, who presented the motion, said that the new policy is not only in conflict with the constitution but that “implementing the CBN’s directive at this point may clearly be unnecessary as it is likely to bear a lot of pressure on teeming Nigerian masses,” who are not on social media.

He said, “as laudable as this directive may appear, it may be unnecessary as it is likely to bear pressure on teeming Nigerian masses at a trying period. This is 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.”

If the new directive is not revised, Nigerians performing any transactions in any of the financial institutions in the country are expected to provide details of social media accounts, including but not limited to Facebook, Instagram, Twitter, and other social media platforms they might possess.