Whereas, enhanced Know Your Customer (KYC) and Customer Due Diligence (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 the National Bank;

Whereas, enhanced KYC/CDD practice including introduction of proper risk mitigation mechanism enables financial institutions to effectively combat illegal and unauthorized transactions being operated through their infrastructure and platform in a manner that promotes shadow banking practice;

Now, therefore, in accordance with article 60 and article 66(2) of Banking Business Proclamation No. 592/2008 as amended by Proclamation No.1159/2019, article 24 and article 34(2) of Microfinancing Business Proclamation No. 626/2009 as amended by Proclamation No.1164/2019, and article 4(2) and article 37(2) of National Payment System Proclamation No. 718/2011, the National Bank of Ethiopia has issued this Directive.