CBN to restrict Bank Verification Number’s violators from banking services
By Dele Ojo
The Central Bank of Nigeria (CBN) would henceforth bar customers of banks who violate the bank verification number (BVN)’s rules, as it dolls out a Revised Regulatory Framework for Bank Verification Number (BVN) operations and Watch-List for the Nigerian Banking Industry. The revised framework was issued in October this year.
As at November 21, 2021 the number of BVN in the Nigerian banking system stood at 51.08 million
The Central Bank of Nigeria (CBN), in collaboration with the Bankers’ Committee, Nigeria Inter-Bank Settlement System(NIBSS), and a German firm, Dermalog, launched the $50 million BVN project on February 14, 2014, with the aim of capturing biometrics of all bank customers and giving them a unique identity that can be verified across the Nigerian banking industry. The project is also aimed at deepening financial inclusion in the country.
To have many more Nigerians on the BVN database, the CBN had in December last year announced the commencement of classification BVN 2.0 plan that allows both the rich and poor in rural areas to access financial services.
Godwin Emefiele, CBN Governor, who broke the news at the end of the 11th Bankers’ Committee retreat in Ogere, Ogun State, explained that BVN would now be classified into two – BVN Premium and BVN Lite. According to him, while the BVN Premium covers customers that can provide the 18 basic requirements for a complete BVN enrolment, the BVN Lite requires minimal documentations like name and phone number for bank customers, especially those in the rural areas that do not meet the full requirements.
The initiative, which is in collaboration with the Nigerian Communication Commission (NCC) and Mobile Money Operators (MMOs), would ensure more Nigerians are brought into the financial system. “The BVN 2.0 classification scheme will help bring more people into the financial system and reduce the financial exclusion rate,” the CBN governor had said. “Know Your Customer (KYC) scheme is part of what will be migrated into the BVN Lite.
However, the CBN said the new framework is to enhance the effectiveness of customer due diligence and Know Your Customer (KYC) processes as part of its overall strategy for promoting a safe and efficient banking and payments system.
Mr. Musa Jimoh, Director, Payments System Management Department, in a circular to banks, said the Watch-list is a database of customers identified by their BVNs, who have been involved in confirmed cases of breaches.
Under the new framework, breaches on the part of customer could see the individual getting barred from entering a new relationship with any banks, adding that where a financial institution chooses to continue an existing business relationship with holders of an account/wallets on the watch-list, the account holder shall be prohibited from all electronic channels such as but not limited to ATM, POS, Internet Banking, Mobile Banking, USSD including the issuance of third party cheques.
The new framework further stipulates that a customer with watch-listed BVN shall not reference accounts, access or guarantee credit facilities. Also breaches on the customer’s part include – use of forged documents, forgery, compromise, complicity and connivance.
In addition listed as punishable breaches were: duplicate enrolment, use of fictitious information, receipts of proceeds of deception, deception, receipts of fraudulent proceeds and any infractions on AML/CFT laws, and dishonest acts.
Others were non-cooperation with efforts (as stipulated in the Regulation on Instant Interbank Electronic Funds Transfer) to reverse wrong credit, erroneous, multiple or duplicated payments or credits; and any infringement of the Cybercrimes (Prohibition, Prevention, etc.) Act. 2015.
The Apex bank said those who misuse identity and financial information, indulge in identity theft and breach of confidentiality would be punished in line with the new regulations.
Meanwhile, banks and other financial institutions involved in BVN operations were instructed by the CBN to ensure all operating accounts/wallets are linked with the signatories’ BVNs within 24 hours of availability.
The Bank also instructed that operators must enrol all mobile money wallets (except Tier 1) subscribers on the BVN database and link their wallets (except Tier 1) with their BVNs within 180 days of the issuance of this framework.
The CBN, however, said it would continue to monitor industry developments and issue further guidance as might be appropriate in the nearest future.
It was part of the overall strategy of ensuring effectiveness of the Know Your Customer (KYC) principles, and the promotion of a safe, reliable and efficient payments system. The BVN gives a unique identity across the banking Industry to each customer of Nigerian banks.
The Framework also defines the establishment and operations of a Watch-list for the Nigerian Banking Industry, to address the increasing incidences, of frauds, with a view to engendering public confidence in the banking industry.
Some of the benefits of bank verification number (BVN) include, but are not limited to:
- gives a unique identity that can be verified across the Nigerian Banking Industry (not peculiar to one Bank)
- Customers Bank Accounts are protected from unauthorized access
- It will address issues of identity theft, thus reduce exposure to fraud
- The BVN will enhance the Banking Industry chances of being able to fish out blacklisted customers
- Reduce queue in Banking Halls
- Standardized efficiency of Banking operations
- The Customers unique BVN is accepted as a means of identification across ALL Nigerian Bank
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