Workload becomes hefty as financial firms hasten to identify customers

Under the direction of National Bank of Ethiopia (NBE) financial firms are in rush to know their customers ahead of the deadline in February 2022. Accounts that do not have the required profile shall be transferred to the regulatory body.
In the past few weeks banks have been approaching their customers through different communication tools like text message (SMS), phone call or media announcement to appear at their branch and recheck their accounts information.
Bank clerks that reside in different banks’ branches told Capital that the new scheme has become an additional workload for them since the number of account holders who are visiting branches are growing by the day.
“The new scheme has imposed further burden on our day to day activity,” a clerk said.
The clerk explained that despite being in a branch that is not regarded as a big branch with regards to the number of account holders, the numbers of visitors have continued to increase in the past few weeks.
“Our bank has already called all its customers to visit their branches. We will also give a call for customers if they do not appear in the coming weeks,” another bank clerk that works on the branch located around Bole Medhanialem told Capital.
She said that the bank called all of its accountholders regardless of customers having the required document like photo and ID with the bank, for a thorough check.
One customer that Capital interviewed for instance said that he received an SMS from the bank that he has a deposit account with, and went on to visit his branch. “However I have learnt that all the required profile was already filled when I opened the account years back and I have proved that on my latest visit to my branch,” he explained his case.
The work load mainly on big banks is very huge according to bankers since their bank account holders are in millions, while the story of Commercial Bank of Ethiopia (CBE) is different owing to its large customer base.
One of the clerks that Capital talked to at one of the state giant CBE branches said that the number of customers visiting in relation with the latest announcement has an unprecedented flocking of customers at their doorstep.
CBE has over 34 million accountholders. Recently Yinager Dessie, Governor of NBE, said that in relation with last year’s currency change an additional 7.2 million bank accounts have been opened. It is estimated about 60 million accounts are opened across all banks.
The new rush is followed by the NBE directive of knowing your customers (KYC) and customer due diligence (CDD) that issued in August 27 which became effective the same day.
The directive, ‘requirements for undertaking account based transactions and ensuring of regulatory limits directive No. FIS/04/2021’ on its preamble stated that KYC and CDD practices are critical to ensure proper identification of customers, appropriate assessment and monitoring of transactions including ensuring of proper compliance to regulatory transaction limits set by NBE.
It added that the implementation of KYC and CDD shall combat illegal and unauthorized transactions.
Thus the directive ordered banks or microfinance institutions and payment instrument issuers to have relevant information of their customers.
Article five sub article 5.1 for instance stated that in opening a deposit account, a financial institution shall at a minimum record comprehensive customer profile that allows it to acquire adequate knowledge of the customer and identify suspicious transactions in a relatively easy and swift manner. “To this end a financial institution shall use annex I, which is part of a directive as a sample on how financial firms register customers profile, of the directive as a minimum standard for account opening at all time in a manner that ensures consistency across the financial industry,” it added.
NBE has given six months starting from August 27 as a transition period that financial firms capturing required customer profile from existed and new customers and configuring existing system in a manner that would enable a financial firms to issue unique customers ID and introduce centralized account opening approval. The transitional period includes loading of the information to the financial institution’s system.
For those who failed to comply with the requirements of this directive the penalty would be from 20,000 to 100,000 birr that differ as per the britches, while other administration measures shall be applied.
According to the information obtained from bankers, the account of those who do not have the required profile shall be transferred to the regulatory body.

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