ENUGU, Nigeria (VOICE OF NAIJA)- The Central Bank of Nigeria (CBN) has given a 30-day timeline to banks and other financial institutions to close accounts without Bank Verification (BVN).
According to data from the Nigeria Inter-Bank Settlement System (NIBSS), 57.39 million customers’ accounts have been linked to their BVNs as of 8 April.
A review of the ‘Regulatory Framework for Bank Verification Number (BVN) Operations and Watch-list for the Nigerian Banking Industry’ informed that the move to close accounts without BVN was driven by the demand for the effectiveness of Know-Your-Customer (KYC) and Customer’s-Due-Diligence principles, and promotion of more safe, reliable and efficient banking and payment systems.
The policy also was meant to address the increasing incidence of fraud and enhance public confidence in the banking industry, and provide a guide for BVN operations and watch-list activities carried out by financial institutions in Nigeria.
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As part of the policy implementation plan, the apex bank directed banks to link customers’ BVN to related accounts/wallets (except Tier 1).
This requires using the customer’s BVN generated after his/her enrollment to link accounts/wallets to which he or she is a signatory after validation.
“No new account/wallet shall be allowed to operate without BVN (except inflows). However, any account/wallet without BVN shall be closed within 30 days,” the framework said.
It noted that delinking customers’ BVN from accounts/wallets involves removing the BVN of a signatory (except for Directors/Beneficial owners) that is linked to an account/wallet.
The apex bank further said that the BVN should be delinked upon the approval of the Chief Audit Executive of the customer’s bank.
“This delinking is for corporate or joint accounts and for activities not associated with breaches. Returns on delinked accounts/wallets (except Tier 1) shall be rendered to the Director of Payments System Management Department on a monthly basis.
“Where there is no linked account, a nil report should be submitted while fraud management is a process aimed at using BVN to deter, prevent, detect and mitigate the risks of fraud in the banking industry,” it added.
Explaining further, it said that a watch-listed individual is barred from entering into a new relationship with any bank.
The CBN said that in a situation where a bank chooses to continue the business relationship with an account holder on the watch- list, an account holder shall be prohibited from e-channels, issuance of third-party cheques, shall not provide reference to another customer, shall not be allowed to access credit facility or guarantee credit facilities.
Also, individuals shall remain on the watch list for up to 10 years, and penalties that apply to such shall apply to their accounts.
“Once a Watch-Listed BVN has served its term on the Watch-List, the Nigerian Interbank Settlement System (NIBSS) shall automatically delist the BVN and notify the stakeholders.
“Where a bank realised that an individual was placed on the watch list in error, the bank shall apply in writing, with supporting documents, to the Director, Risk Management Department of the CBN, for approval to delist,” it said.