Banks Demand Extra KYC for Domiciliary Account Online Transfers

Banks in Nigeria in Nigeria have started informing customers that they can no longer make instant online transfers out of their domiciliary accounts without proper documentation or Know Your Customer (KYC) requirements.

Analysts say this is yet another attempt by the central bank to track the flow of foreign exchange within the banking system, reducing incidences of undocumented transfers or currency exchange occurring outside of the banking sector.

According to the Tribune, before now, all a customer had to do was log into their banking application on their mobile phone or via a browser to make transfers without the need to provide any documentation.

However, emails sent to customers by banks last week contain new documentation requirements that must be provided before the transfers are allowed to proceed.

“This is to inform you that instant completion for international transfers on our digital platforms will cease from March 20, 2021.

“All international third-party transfers initiated on any of our digital channels will be completed at the back office after receipt of relevant supporting documents.

“Kindly ensure you send relevant supporting documents for your international transfers immediately transaction is initiated online to” one of the emails from a new generation bank to its customers read in part.

“Samples of supporting documents to be provided for international transfers to third parties are invoices, bills, demand notes, among others.

The bank further stated that for medical, insurance, school fees, subscriptions and other similar invisible payments; for transparency and in line with CBN eligibility requirement, the purpose of payment must be clearly indicated for all international transfers in the narration section provided.

The advice from the bank also informed its customers that transfers that do not include the supporting documents listed above will be rejected after the assigned cut off time.

“Please note that for control purposes, all payments initiated without the relevant supporting documents being sent to the above-noted email will be rejected after the existing currency cut-off time (Euro- 1:30 PM, GBP and others – 2:30 PM and USD- 3.30 PM) same day.”

Bankers say this rule applies only to online transfers outside of a bank using mobile apps or internet banking.

To make the transfer, a customer will attach documents via email and then wait for them to be approved by the backroom staff of the banks before the transfer is finalized.

Without the approval of those in the backroom, the transfer will not be completed.

However, transfers to personal accounts will not be affected by this rule as no supporting document is required to make transfers from your personal account to another personal account or from one company account to the same account overseas.

“Transfer from to a third party will require the provision of any of the respective documentation required above for any transfer between account and a third-party account abroad.

Analysts say this rule will affect how people transfer foreign exchange from one account to another and will impact everything from transferring money to spouses, sibling, or family member, payment of invoices, and other forms of online transfer that did not need documentation.