CBN Orders Banks To Erase All Accounts Without BVN

The Central Bank of Nigeria (CBN), has given banks and other financial institutions a 30-day deadline to cancel accounts without Bank Verification Number (BVN).

Financial institutions are required to connect a customer’s BVN to any associated accounts or wallets (with the exception of Tier 1). following confirmation, it is necessary to link the accounts/wallets to which the customer is a signatory using the BVN that was generated during enrolment.

According to information from the Nigeria Inter-Bank Settlement System (NIBSS), As of April 8, 57.39 million customers’ accounts were connected to their BVNs.

The instruction was given in response to calls for the effective application of the Know-Your-Customer (KYC) and Customer’s Due Diligence principles, as well as the development of banking and payment systems that are more secure, dependable, and effective.

Additionally, it is anticipated that it would combat the rising number of frauds, boost public confidence in the banking sector, and serve as a manual for financial institutions in Nigeria conducting watch-list and BVN operations.

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The statement added: “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.

“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, the 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.”

Anyone who is on the watch list is prohibited from starting a new account with any bank. According to the apex bank, if a bank decides to keep doing business with a customer who is on a watch list, that customer will not be permitted to use e-channels, issue third-party checks, give references to other customers, or access credit facilities or guarantee credit facilities.

Additionally, individuals will stay on the watch list for up to 10 years, and any penalties will also be applied to their accounts.

The accompanying paperwork must be properly authorized by the bank’s MD/CEO and Chief Audit Executive. The bank must notify NIBSS of the authorisation for delisting after receiving it from CBN. A delisting request can only be made by the organization that added the person to the watch list.

According to the new framework, it is the CBN’s duty to conduct oversight over BVN operations and systems, monitor other stakeholders to ensure compliance, issue circulars to regulated institutions on the operations of the Watch List, review the framework for the operations of the Watch-List as necessary, and apply the proper sanctions for non-compliance with the Regulatory Framework.

According to the new framework, it is the CBN’s duty to conduct oversight over BVN operations and systems, monitor other stakeholders to ensure compliance, issue circulars to regulated institutions on the operations of the Watch List, review the framework for the operations of the Watch-List as necessary, and apply the proper sanctions for non-compliance with the Regulatory Framework.

The NIBSS is expected to work with other stakeholders to create and review the Standard Operating Guidelines of the BVN, start reviewing the Guidelines as needed with the CBN approval, ensure that the BVN system runs without problems, maintain the BVN database, ensure adequate security of the BVN data, and maintain an online real-time Watch-list Portal.