The BVN was introduced by the Central Bank of Nigeria and was launched February 14th last year. It is the registration of customers in the financial system using biometric technology.
In order to fast-track enrolment of customers for the BVN, the CBN October last year, stipulated targets and deadline for banks. The apex bank also made the BVN a condition for accessing loan.
The CBN stated in circular, “In order to fast-track the enrolment process: DMBs are expected to give attention to enrolment of their customers; All DMBs are required to enrol at least, 40 percent of their customers on or before 31st December 2014, and 70 percent on or before 30th March 2015; All DMBs are required to fully integrate their core banking system, latest by 31st October 2014, to ease the enrolment process; All new loans must have the BVN as condition precedent to drawdown, with effect from 3rd November 2014; All credit customers must have BVNs by 31st December 2014; The Central Bank of Nigeria will monitor compliance.”
But records from the Nigeria Interbank Settlement System (NIBSS) show that there were about 45.85 million total bank accounts unlinked, but when compared with the active accounts the number dropped to 15.72 million unlinked to BVN as of February 2017.
The record further shows that as of October 8th, 2017, the total BVN issued were 30,511,506.
With the new circular, the apex regulator orders banks to report confirmed fraudulent individuals’ BVNs to NIBSS for update of the watch-list database; report the BVN of deceased customers to NIBSS for update on the BVN database; render returns to NIBSS for enlisting individuals involved in confirmed fraudulent activities, with the report signed by the chief audit executives.
The new regulation also states that CBN (Banking Supervision Department) shall be granted real-time online access to the watch-list database while the chief audit executive of the customer’s bank shall be notified, where a bank needs to watch-list a customer of another bank.
The chief audit executive of the customer’s bank, upon notification, shall investigate within one month and after confirmation of the fraudulent activity, watch-list the customer within two business days.
Appropriate penalties shall apply to any bank that fails to enlist individuals confirmed to be involved in fraudulent activity, it said.
“Any other stakeholder who fails to perform its stipulated responsibilities shall be penalized by the CBN. A watch-listed individual shall not be allowed to enter into new relationship with any bank. A bank may choose not to continue business relationship with account holder on the watch-list.
“Where a bank chooses to continue an existing business relationship with holders of account on the watch-list, the account holder shall be prohibited from all e-channels, such as ATM, POS, Internet Banking, Mobile Banking, including issuance of third-party cheques.
“A watch-listed customer shall not provide reference to another customer, neither shall he/she be allowed access to credit facility or guarantee credit facilities,” the new circular directed.
The CBN however extended BVN registration for Other Financial Institutions (OFIs) like microfinance banks, mortgage banks and finance houses to December 31, 2017.