Ethics and Compliance in Nigerian Banking: A Study on Anti-Money Laundering Practices and Implementation Challenges

This paper reiterates the fact that Nigerian banks can unlock profitable and sustainable increase in their risk assets portfolio when risk asset growth is undertaken in a responsible manner and in conjunction with regulatory adherence. In Nigeria, money laundering and other financial crimes have deterred economic development and credibility towards the elaborate anti-money laundering statutory framework. This paper will explore the practical issues associated with Nigerian commercial banks in implementing AML compliance, and look at some of the conflicts between ethical requirement, regulatory requirements and operational functionality. Based on regulatory reports, case studies in industry, and cross-jurisdictional comparisons, the study brings out existing administrative gaps in enforcement capacity, institutional overlaps, cultural barriers to transparency, and technological shortcomings. The study highlights the issues of how poor compliance negatively affects Nigeria development in international financial practices as well as the stability of financial operations. In the final analysis, the article has implications to the current debates about how emerging economies could strike the right balance between financial inclusion and strict AML practices with their regulatory journey in Nigeria becoming one such case study that can inform future deliberations on the topics of compliance across nations. Lessons go beyond Nigeria and have valuable implications of other emerging economies that are facing similar dilemma of credit growth and portfolio quality.

Stating that the two missions of maximizing asset growth and minimizing default are driven by similar factors, the study established a platform where banks, regulators, and policymakers reconsider the approach towards credit growth. A sound portfolio management will not only improve the performance of the brands, but also make the financial sector of Nigeria more resilient.