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Tag: BVN

  • Only 24% of Nigerians have BVN, says EFInA report

    Only 24% of Nigerians have BVN, says EFInA report

    The Enhancing Financial Innovation & Access (EFInA), a financial sector development organisation, has said that only 24 per cent of Nigerians have Bank Verification Number (BVN). The figure is contained in the Access to Finance 2016 Survey Data meant to promote the role of government in driving financial inclusion in Nigeria.

    The Chair of EFInA’s Board, Modupe Ladipo, shared barriers responsible for increasing the financially excluded population in Nigeria. She indicated that “generally, income levels in Nigeria are very low. She said that 19.6 per cent of Nigerians mainly get their source of income from non-farming business while 19.1 per cent get theirs from family business (subsistence or commercial farming).

    Only 4.2 per cent of the adult population get their source of income from the formal sector. In addition, she commented that EFInA observed that the north has a high level of financial exclusion. This is as a result of massive job losses, limited resources and no basic necessities of opening a bank account.

    “Out of 96.4 million adults in Nigeria, 56.3 million (58.4 per cent of the adult population) are now financially served. Also, 40.1 million Nigerian adults (41.6 per cent of the adult population) are financially excluded (without any form of access to financial services). The National Financial Inclusion Strategy target is to lower this figure to 20 per cent of the adult population by 2020,” she said.

    She highlighted the issue of inaccurate data in assessing economic growth in Nigeria. ‘‘There are lots of issues in terms of validation and credibility. According to National Identity Management Commission (NIMC), only six per cent of Nigerians are duly registered as at 2016. Only 24 per cent of the population has a Bank Verification Number (BVN). We really need to devise how to get a unique form of identification so that we can start to address some of these issues,” she said.

    The EFInA hosted a workshop with stakeholders such as the Federal Government, United Nations (UN), Heads of Federal Financial Inclusion Initiatives, Academics, Financial Institutions and Financial Services Regulators in Nigeria to advocate for the implementation of policies to drive financial inclusion in Nigeria.  The theme of the workshop was ‘’The Role of Government in Driving Financial Inclusion in Nigeria’’.

    She emphasized that the number of microfinance adult users declined from 2.6 million in 2014 to 1.8 million in 2016. There is a general problem around trust as the licenses of some microfinance banks have been revoked. With a lot of bank charges, account owners are left with little money in their bank account.

    Currently Nigeria has 58.2 million unique mobile phone users, the contrast to 27 million using mobile banking. This underscores the immense potential which mobile banking shows for advancing financial inclusion.

    The Governor of Central Bank, Godwin Emefiele, in his address delivered by Director, Development Financing, CBN, Mudashiru Olaitan, explained that initiatives like the BVN scheme and others have addressed issues connected to identification in the banking system

  • Banks may recall loans over BVN

    Banks may recall loans over BVN

    Banks are bracing for the effects of a likely  forfeiture of funds in accounts without the Bank Verification Number ( BVN ).

    Should the government enforce the court order on such accounts, the banks will

    • recall loans from customers; and
    • lay-off staff.

    Speaking yesterday on the development, former Registrar/Chief Executive, Chartered Institute of Bankers of Nigeria (CIBN), Uju Ogubunka, said a massive loan recall would help the lenders keep their liquidity ratio within regulatory threshold.

    Liquidity ratios are based on various portions of a bank’s current assets and liabilities taken from its balance sheet. A bank with a low coverage rate should raise a red flag for investors and customers as it may be a sign that it will have difficulty meeting its short-term financial obligations, and consequently in running its day-to-day operations.

    The Central Bank of Nigeria’s (CBN’s) Economic Report obtained by The Nation showed that aggregate credit (net) to the economy stood at  N27.47 trillion in the first quarter of 2017. The report also indicated that banks loaned N22.27 trillion to the private sector within same period. However, it is not yet established the percentage of the loans that may be recalled by the lenders.

    Justice Dimgba Igwe of the Federal High Court, ruling on an ex parte application filed by the Federal Government through the Office of the Attorney-General of the Federation on October 21, granted the temporary forfeiture of funds in accounts not linked to BVN within two weeks unless the owners justify their ownership of such accounts. The deadline for compliance ended last Friday.

    Ogubunka, who is now the President, Bank Customers Association of Nigeria (BCAN) said many banks have ‘core deposits or savings’ which are usually kept with them for long time and used for long-term financing because the owners of the funds might have abandoned them. He said the new policy will likely affect such funds and shake liquidity positions of banks that rely on such funds to finance long-term projects.

    He disclosed that one of the risks banks suffer is regulatory, but the current challenge facing the lenders is legal risks and there are likelihood that some banks may recall credits given out to customers to boost liquidity position.

    He added that such remains an option because of the shortness of time, which makes it difficult for the affected lenders to go for fresh capital immediately.

    When asked if such practice will not be breach of the loan contract, Ogubunka said: “It will not be breach of contract. There is always a caveat in every loan offer which stipulates that the bank may recall the credit or change conditions of the loan. So, any bank that recalls loans under this circumstance is covered by law because such lender needs to stay in business”.

    He also said that job losses remain imminent because the level of deposit to be lost by the affected banks seems huge, and lenders may want to minimize their cost of operation by laying off some of their staff.

    “There will so many implications but we pray no bank goes under. We may see some banks with porous liquidity as the Federal Government begins to implement the court order. But government has to be cautious in implementing this policy because it has huge implications for the banks, customers and economy,” he said.

    He said enough time was not given to bank customer to comply with the directive given that the BVN was not originally meant to be used to confiscate customers’ money but to protect their accounts. “Some people may have taken the BVN policy for granted, but the reality now is that if you don’t have BVN, you may lose the money in your account to the Federal Government,” he said.

    Findings showed that  it would be very difficult to put a figure to the 46 million accounts not linked to BVN but the first generation banks are believed to have the largest number of dormant accounts, although that has not been established. These banks have the largest number of dormant accounts because of how long they have been in the business.

    The CBN through the Banker’ Committee and in collaboration with all banks in Nigeria on February 14, 2014, launched a $50 million centralised biometric identification system for the banking industry tagged Bank Verification Number (BVN). The BVN gives a unique identity that can be verified across the Nigerian Banking Industry (not peculiar to one bank) while bank customers are protected from unauthorised access.

    The Federal Government secured an interim forfeiture order from Federal High Court which would now allow it to freeze the accounts of bank customers in Nigeria who have no Bank Verification Number, BVN.

    The order obtained before Justice Dimgba gave the Federal Government the nod to instruct the banks to disclose any investments made with these funds and to freeze any outward movement from these accounts.

    The court order mandates the CBN to appoint an examiner to look into the books of any commercial bank that fails to comply. The banks are expected to provide the names of accounts without BVN, account numbers, outstanding balances, domiciliary accounts without BVN, branch/locations where these accounts are domiciled.

    Read Also: BVN: First generation banks to suffer biggest losses

  • BVN: Banks that may suffer from deposit loss

    BVN: Banks that may suffer from deposit loss

    The biggest casualties in terms of deposit loss should the Federal Government go-ahead to implement court order on funds forfeiture for Bank Verification Number (BVN) non-compliant accounts will be the first generation banks, The Nation has learnt.

    These set of banks, according to an industry source who spoke anonymously, seem to have the largest number of customers that have stayed with them for close to or over 100 years.

    Justice Dimgba Igwe of the Federal High Court, ruling on an ex parte application filed by the Federal Government through the Office of the Attorney-General of the Federation on October 21, granted the temporary forfeiture of funds in accounts not linked to BVN within two weeks unless the owners justify their ownership of such accounts. The deadline for compliance ended yesterday.

    The source said it would be very difficult to put a figure to the 46 million accounts not linked to BVN, adding that: “The first generation banks are believed to have the largest number of dormant accounts, although that has not been established. These banks have the largest number of dormant accounts because of how long they have been in the business,” he said.

    The source explained that some new generation banks also have a large number of accounts, but a majority of their customers are from the middle class. He said many of the customers joined the bank during or after the banking consolidation of 2005, in what is regarded in the banking industry as ‘’Flight to Safety’’.

    “A lot of the middle class tend to associate more with some new generation banks. So, even though the accounts are many, but they remain largely active,” the source said.

    The banks with the largest impact are likely to lose deposits running into billions of naira, and that may affect their liquidity positions.

    The Federal Government has secured an interim forfeiture order from Federal High Court which would now allow it to freeze the accounts of bank customers in Nigeria who have no Bank Verification Number, BVN.

    The order obtained before Justice Dimgba gave the Federal Government the nod to instruct the banks to disclose any investments made with these funds and to freeze any outward movement from these accounts.

    The court order mandates the Central Bank of Nigeria (CBN) to appoint an examiner to look into the books of any commercial bank that fails to comply. The banks are expected to provide the names of accounts without BVN, account numbers, outstanding balances, domiciliary accounts without BVN, branch/locations where these accounts are domiciled.

    The CBN through the Banker’ Committee and in collaboration with all banks in Nigeria on February 14, 2014, launched a centralised biometric identification system for the banking industry tagged Bank Verification Number (BVN). The BVN gives a unique identity that can be verified across the Nigerian Banking Industry (not peculiar to one bank) while bank customers are protected from unauthorised access.

  • Anxiety grips banks over Nov. 3 deadline for BVN

    Anxiety grips banks over Nov. 3 deadline for BVN

    Banks were gripped yesterday by the fear of a major liquidity crisis should the government pull out funds belonging to customers without Bank Verification Number (BVN).  The deadline given by the court for such customers to lose their cash is tomorrow.

    Justice Dimgba Igwe of the Federal High Court, ruling on an ex parte application filed by the Federal Government through the Office of the Attorney-General of the Federation on October 21, granted the temporary forfeiture of such cash within two weeks unless the owners justify their ownership of such accounts.

    There has been confusion over the status of such funds after the 14-day deadline.

    The Nation learnt yesterday that the Central Bank of Nigeria (CBN) might, at the expiration of the deadline, compel the 21 commercial banks to provide a status report on non-BVN-linked accounts in their books. When that happens, banking sector liquidity may suffer as lenders begin to return un-linked funds to government coffers.

    The Vice-President, West African Pan African Lawyers Union (PALU), Emeka Obegoru, said if  there was no suit challenging the court ruling, the banks will have to produce a full list of their customers without BVN.

    CBN on TSA
    CBN Governor, Godwin Emefiele

    He said failure to comply meant the banks will have to tell the court why they could not produce the list.

    Director-General of the West African Institute for Financial and Economic Management (WAIFEM) Prof. Akpan Ekpo agreed with Obegoru. He said  if neither the banks nor individuals complained and the timeline elapsed, the government must find a way to get the funds from the lenders.

    He disclosed that many people with skeletons in their cupboards still refused to enroll on the BVN network because it will expose their illicit financial dealings.

    He, however, said it would remain an uphill task for the government to trace the funds, given that the banks are more likely to protect their customers unless whistle blowers give out information on the accounts to the public or the government.

    Ekpo said keeping money in safe, a practice that does not require BVN, had been a regular practice, and will continue to be an avenue where fraudulent persons keep huge cash in banks’ vaults to evade asset tracers. “I think it will turn a money spinner for whistleblowers as government pressures the banks to get the true position of key accounts without BVN,” he said.

    Ekpo said lenders could collude with high net-worth customers or politically exposed persons without BVN or accounts not linked to BVN to ensure their financial dealings are not exposed. “How to get the funds out from the banks is going to be a problem for government because chances are that banks will protect their customers. Even if the government decides to raid the banks, genuine customers’ money may be carted away,” he said,

    Former Executive Director, Keystone Bank, Richard Obire, said for now, neither banks nor civil society groups had challenged the expartethe judgment, hence leaving the implementation of the ruling at the discretion of the Federal Government.

    He said where the funds involved were large enough, the liquidity of the banking sector might be threatened as more cash leave to government coffers. “If the funds leave the banks to government coffers, the affected lenders may suffer liquidity challenges depending on the level of their customers’ involvement,” he said.

    He added that the government may react to the criticisms by being selective in its implementation.

    Principal Counsel at Eze & Associates, Chukwuemeka Eze, said when the implementation begins, individuals affected by the policy could challenge it in court. That means the burden of proof will shift to the owner of the money not linked to the BVN. “The person has to prove where he was, and why he was not able to enroll on the BVN network. It will be based on individuals making case for themselves when the timeline expires tomorrow,” he said.

    Eze said the banks might escalate the discussion at the next Bankers’ Committee meeting because of the sensitive nature of the matter involved.

    “When the banks come under serious pressure as the implementation begins, which is likely, they will have to call for a Bankers’ Committee meeting to decide on how to approach the dilemma. But there are still going to be some exceptions, such as Nigerians in Diaspora and those serving long prison sentences,” he said.

    Eze said the government had to be careful in implementing the court order, as it had the capability of causing economic dislocation. The real targets, according to him, are people who open accounts with fake names to hide fraudulently obtained wealth.

  • ABCON sensitises BDCs on BVN validation

    Association of Bureaux De Change Operators of Nigeria (ABCON) in collaboration with the Nigeria Interbank Settlement System (NIBSS) has carried out a comprehensive sensitisation of Bureaux de Change (BDCs) on usage and deployment of Bank Verification Number (BVN) Validation Portal provided by the NIBBS.

    Speaking on the exercise, ABCON President, Alhaji Aminu Gwadabe, said the BVN validation sensitisation programme was part of the confidence-building agenda of the association to ensure that BDC operators abide by the rules guiding the Nigerian Foreign Exchange (Forex) Market.

    He said the sensitisation programme became exigent given that the world is going digital, and BDCs under his leadership must stay ahead of the pack, deploying time-tested technology to deliver seamless services to their numerous customers.

    According to him, the sensitisation programme was held in the six geopolitical zones  namely: Kano, Lagos, Awka and Abuja, among others. The programme, he added, was attended by over 3,500 registered operators across the country.

    “The ABCON/NIBSS Sensitisation Programme on BVN Validation Portal has been on in the last two months. We are happy that all our six geopolitical zones have been covered. It is our own input to the CBN’s policy implementation and an opportunity to take confidence-building in BDCs’ operations to the next level,” he said.

    Gwadabe added that BDCs are ready and committed to abide by the CBN’s regulations on the forex market. “The CBN directed BDCs to validate the authenticity of BVN that clients wanting to buy forex submit to them. Already, the BVN is becoming very important to government, hence, we are thinking ahead and equipping our members with the right skills and technology. We are committed to ensuring that our members do not fall short of regulatory requirements,” he said.

    He said the BDCs have supported the CBN to achieve exchange rate stability as seen in the naira exchanging at N361/$1 at the weekend, from over N520/$1 last February.

    Gwadabe appealed to the CBN to help BDCs reduce rising bank charges associated with their transactions. “BDCs are charged N1,000 per N1 million transaction and with each operator paying as much as N67,000 for the N67 million monthly transactions. These charges are too high, and I urge the CBN to help reduce the charges, which are becoming huge burden on BDC operators,” he said.

    The CBN had directed all licensed BDCs to ensure that all transactions they consummate have the BVN of the buying customers. The information must be included in the forex returns to the regulator. In the case of corporate customers, the BVN of a director of an authorised signatory of the entity must be provided to the BDC.

  • BVN: make haste slowly

    BVN: make haste slowly

    •CBN must tread softly not to trample on the innocent

    The Federal Government may have finally opened a vital flank in the anti-corruption fight. The ruling it procured last week from the Federal High Court in Abuja directing all commercial banks in the country to freeze all bank accounts that are devoid of the Bank Verification Number (BVN) may well turn out most far-reaching, considering that a bewildering 46 million such untagged accounts are said to exist.

    That such a number of bank accounts are still without the biometric data compliant BVN tag after about three years of its introduction is in itself suspicious and requiring of interrogation.

    The BVN scheme actually became necessary when the Nigerian banks seemingly failed in their primary duty of customer identification. The ‘know-your-customer’ (KYC) rule is at the heart of modern banking which managers of financial houses in Nigeria have grossly neglected and indeed, abused. Every customer’s database is expected to be complete, sacrosanct and accessible; leaving no room for any iota of doubt and confusion. But it is a grave indictment on banks that they cannot maintain credible record of their customer base.

    This led to the introduction of the BVN unified database by the Central Bank of Nigeria. Yet three years down the line, such a large number are still to be fully captured and integrated into a unified financial database.

    On this score, the move by government last week may well be said to be in order and salutary. Some of the orders by the court request that banks, apart from freezing all accounts without BVN, must publish names and details of all such customers.

    Further, that CBN and commercial banks must disclose all accounts in their custody and the balances in such accounts. That the chief compliance officers of banks must disclose details of such accounts, including their owners and proceeds with affidavits of compliance. All outward payments, operations or transactions must be stopped and full disclosures of investments made with funds from these accounts without BVN in any products, must be made.

    This interim order has been made pending the determination of the substantive application seeking the forfeiture of the balances in the accounts to the Federal Government.

    There is no doubt that this move by the Federal Government has jolted the deposit money banks which are suspected to be deliberately sabotaging the government’s efforts at fighting graft by colluding with corrupt individuals and government officials. An untracked bank account is a veritable conduit for money laundering and all sorts of financial malfeasance.

    And many of the commercial banks have been guilty of all these. Recall the recent manipulation of the foreign exchange process and the subversion of the Treasury Single Account scheme. There really cannot be a proper check on the activities of the major financial houses if all customers’ accounts are not accessible to the CBN and all the necessary regulatory authorities.

    However, while the Federal Government is lauded for being on the right track in boosting its anti-graft war, many have called for caution and a need to make haste slowly. It has been noted that many account holders in the rural areas and the Diaspora may not have been able to complete the task of registering for the BVN. It has been particularly difficult for most Nigerians living abroad to get on the BVN platform because of restricted access to registration points.

    It is therefore suggested that more time is required while more windows are opened for ease of BVN registration, especially for Nigerians in the Diaspora. Rushing to freeze accounts and confiscate bank balances has also been deemed to be a violation of basic rights of citizens as well as a trampling of the constitution. Having a BVN was never a precondition for opening and operating a bank account in the first place, it has been argued.

    In summary, government, even in the pursuit of criminals, noble as this may seem, must err on the side of the innocent.

  • BVN: Presidential aide appeals for more time for Nigerians in Diaspora

    BVN: Presidential aide appeals for more time for Nigerians in Diaspora

    Senior Special Assistant to the President on Foreign Affairs and Diaspora, Mrs. Abike Dabiri-Erewa, has appealed to the Central Bank (CBN) and Attorney-General of the Federation (AGF) to give more time to Nigerians in Diaspora to register for their Bank Verification Number (BVN).

    Mrs. Dabiri-Erewa urged the apex bank to put logistics in place for Nigerians in the Diaspora to obtain the BVN to avoid forfeiture of their savings in their bank accounts.

    The appeal is coming on the heels of an interim order of forfeiture granted by a Federal High Court in Abuja on October 17, for the banks to show cause within 14 days why the balances in such accounts should not be forfeited.

    A statement in Abuja by Abdur-Rahman Balogun, Special Assistant Media to Mrs. Dabiri-Erewa implored CBN to make it possible to Nigerians abroad to have their BVN done in their countries of abode following challenges they were encountering.

    She argued that such Nigerians have been remitting billions of U.S. Dollars back home on yearly basis, the highest on the continent of Africa.

    The Presidential aide added that the citizens have been contributing to the country’s socio-economic growth.

    “I hereby appeal to the CBN to look into the challenges the Nigerians living abroad face in getting their BVN done and extend the deadline for them to get the BVN done,” Mrs. Dabiri-Erewa pleaded.

    The Presidential aide also pleaded with the commercial banks to make the procedure easier for their customers, especially those living outside the country, to be able to meet up with the new deadline.

    The Federal Government had on September 28, instituted an action in court for the forfeiture of any balance in a bank account without a BVN.

    “This is why the Attorney-General of the Federation should intervene in this matter to assistNigerians living abroad, who who are at disadvantage by allowing them more time to comply with the BVN directive,” she said.

    The present practice is that banks only permit deposits into such accounts. No withdrawal is allowed. Should the Federal Government succeed, the money in the accounts will be forfeited permanently.

     

     

     

  • BVN: Naira scarcity pushes interbank rate to 120%

    •More time sought for Nigerians in Diaspora

    The Federal High Court, Abuja, ruling, granting a temporary forfeiture order on accounts not linked to Bank Verification Number (BVN) has raised the interbank rate to record high of 120 per cent.

    The court had ruled that funds in the affected accounts will be forfeited to the government within the next two weeks unless they can justify their ownership of such accounts. The ruling was also meant to enable the  government seek stakeholders’ compliance with money-laundering rules.

    The Nigerian overnight lending rates were quoted around 120 per cent yesterday after a court ordered a freeze on millions of bank accounts with incomplete identity documents and the Central Bank of Nigeria (CBN) sold treasury securities to tighten liquidity, traders said.

    The CBN has kept rates high to fight inflation and currency weakness and to attract foreign investors. It has been selling treasury securities almost four times a week to soak up naira liquidity.

    Overnight rates had closed as high as 148 per cent on Monday as news of the court order filtered into the market. It later fell on Tuesday but remained above 100 percent. “There’s no liquidity in the market. The aim is to keep the money supply low as a way of controlling inflation and supporting the currency,” one trader told Reuters.

    Inflation slowed for the eighth month in September but was still high at 15.98 percent. The central bank has left benchmark interest rates at 14 percent for more than a year to keep debt market yields in positive territory to lure investors.

    The debt office plans to auction 100 billion naira in bonds on Wednesday. The central bank sold 18 billion naira in open market bills on Tuesday and another 11.3 billion the previous day.

    Traders said the liquidity deficit in the banking system was widening, after hitting 300 billion naira on Tuesday.

    On Monday, the central bank said it had sold $195 million to lenders as part of its regular dollar sales to boost forex liquidity and keep the currency stable, but the move was contributing to a naira shortage, traders said.

    Meanwhile, the Senior Special Assistant to the President on Foreign Affairs and Diaspora, Hon. Abike Dabiri-Erewa, has appealed to both the CBN and Attorney-General of the Federation (AGF) to put modalities and logistics in place for Nigerians in the Diaspora to obtain their own BVN to avoid forfeiture of their savings in their respective bank accounts.

    In a statement in Abuja by Abdur-Rahman Balogun, Special Assistant Media to Hon. Abike Dabiri-Erewa, implored CBN to make it possible to all Nigerians in the Diaspora to have their BVN done in their countries of abode as there has been challenges in getting it before now.

    The Nigerians in the Diaspora has been remitting billions of US Dollars back to the country on yearly basis, the highest on the continent of Africa, thus contributing to the socio-economic development of the country..

    “I hereby appeal to the CBN to look into the challenges the Nigerians living abroad face in getting their BVN done and extend the deadline for them to get the BVN done’’, Dabiri-Erewa pleaded.

    The Presidential Aide also pleaded with the commercial banks to make the procedure easier for their customers, especially those living outside the country, to be able to meet up with the new deadline.

  • BVN: More time sought for rural dwellers

    BVN: More time sought for rural dwellers

    Bank customers in the rural areas should be given more time to link their accounts to the Bank Verification Number (BVN) network since they are not looters, stakeholders have advised the Federal Government.

    The appeal came on the heels of the Federal High Court, Abuja, ruling granting a temporary forfeiture order on accounts not linked to BVN. The court ruled that funds in such accounts should be forfeited to the government within the next two weeks unless the owners can justify their ownership of such accounts.

    To Cowry Assets Limited Managing Director Johnson Chukwu, the two-week notice is too short. He urged the government to apply to the court to review the deadline because many people, especially at the grassroots, were probably unaware of the BVN directive.

    He said the government should set a N5 million and above forfeiture threshold to ensure that only suspicious accounts are targeted and tracked.

    Chukwu explained that families trying to access funds from accounts of dead relatives and are yet to perfect letter of administration will need more time for the process. He said not extending the deadline would have adverse effect on such families.

    Director-General of the West African Institute for Financial and Economic Management (WAIFEM) Prof. Akpan Ekpo said any genuine bank customer should not shy away from BVN adding that those not complying might have things to hide.

    He however, agreed with Chukwu that the government should ensure that rural dwellers were properly informed. He also advised the government to ensure that Nigerians in the diaspora had enough time and information to have their accounts at home linked to their BVN.

    Head, Nigeria Office, Inter- Governmental Action Group Against Money Laundering in West Africa (GIABA) Timothy Melaye said the court order could be legally challenged and that the government should approach the National Assembly to make it a law for funds in unlinked accounts to be forfeited.

    He said bank customers should be uniquely identified with their Know Your Customer (KYC) taken as it is in international banking practice.

    Melaye said such practice would help to reduce fraud, adding that many countries were trying to copy Nigeria on the BVN achievement.

    “The BVN remains a good project but the procedures for forfeiture of funds can be challenged in court if it is not made constitutional, or backed by law,” he said.

    An economist and Managing Director/CEO of Economic Associates (EA), Mr. Ayodele Teriba, said the BVN had made the banking sector safe, and implementation of the directive would make the sector safer. “If you do not have BVN, it means you do not exist. In a fraud-prone environment, no account should not be linked to BVN. Why will people want to run accounts and not comply with the BVN directive? It has to end someday and deadline should not be forever,” he said.

    Teriba said not having BVN is like getting a mobile phone without registering it. Such phone can easily be put to dubious uses that are not in the interest of the society.

    Former Executive Director, Keystone Bank, Richard Obire said the court’s directive was in order, provided it is in public interest.

    He said the government should set a five-year timeline during which it would sensitise people on the dangers of not linking their accounts to BVN. He also advised the government to establish a law that will make it legal for owners of accounts not linked to BVN to forfeit the funds.

    “We are always in a hurry. Government should set a five-year timeline during which all accounts must be linked to BVN or their balances forfeited and put in a specialised account. What the forfeited funds will be used for should also be spelt out,” he said.

    According to the Nigeria Interbank Settlement System (NIBSS), there are nearly 80 million bank accounts in Nigeria; only 30 million unique individuals can be identified with BVN.

    The CBN in 2014, through the Bankers’ Committee, Deposit Money Banks and NIBSS,  introduced the centralised biometric identification system, tagged BVN. The BVN became imperative following the increasing incidence of compromise on conventional security systems, such as password and Personal Identification Number (PIN) of customers.

    The BVN involves identifying an individual based on physiological or behavioural attributes, such as fingerprint, signature and others. A customer’s unique BVN is accepted as a means of identification across all the banks.

     

  • Court stops banks from operating accounts without BVN

    Court stops banks from operating accounts without BVN

    •Directs them to disclose accounts’ owners
    •Funds in accounts to be forfeited if unclaimed in 14 days

    Bank account owners who are yet to have a Bank Verification Number (BVN) run the risk of forfeiting their money to the federal government within the next two weeks unless they can justify their ownership of such accounts.

    A Federal High Court in Abuja has granted a temporary forfeiture order on such accounts.

    It also restrained commercial banks from operating such accounts for the meantime and directed them to disclose the owners of the accounts and the status of the funds in them.

    Justice Nnamdi Dimgba handed down the order on October 17  while ruling on an ex-parte motion filed by the Federal Government and the Attorney General of the Federation (AGF).

    Affected by the orders are Access Bank, Citi Bank, Diamond Bank, Ecobank, Fidelity Bank, First Bank, First City Monument Bank, Guaranty Trust Bank, Heritage Bank, Keystone Bank, Skye Bank, Stanbic IBTC, Standard Chartered, Sterling Bank, Union Bank, Unity Bank, United Bank for Africa, Wema Bank and Zenith Bank.

    The ex-parte motion – FHC/ABJ/CS/911/2017- was filed on September 28 this year and argued by the plaintiffs’ lawyer, A. D. Tyoden.

    It was brought pursuant to the Central Bank of Nigeria’s Know Your Customers Guidelines and Section 3 of the Money Laundering (Prohibition) Act of 2011 as amended.

    The enrolled orders from the ruling reads: “That the 1st – 19th defendant banks shall disclose: (a) the names of the accounts as operated; (b) account number(s); (c) outstanding balances (d) domiciliary accounts and (e) the branch/location where the accounts are domiciled of all accounts without BVN.

    “That the 1st – 19th defendant banks to disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial Papers and any other relevant information related to the transaction made on the accounts.

    “That an order is hereby made freezing the said accounts by stopping all outward payments, operations or transactions (including any bill of exchange) in respect of the accounts pending the hearing and determination of the substantive application.

    “That an order is hereby made directing the 1st to 19th defendant banks to disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and any other relevant information related to the transaction made on the accounts.

    “That an interim order is hereby made directing the Central Bank of Nigeria and the Nigeria Interbank Settlement Systems to validate the information contained in the affidavit of compliance/disclosure filed by the respective 19 banks within seven days from the date of service on the Central Bank and NIBSS.

    “That an interim order is hereby made appointing a Bank Examiner from the Central Bank of Nigeria to examine the books of any bank that fails to comply with the order of the honourable court to file affidavit of disclosure.

    “That an interim order is hereby made granting leave to the applicants or any officer authorised by them to advertise the accounts without BVN disclosed by the bank in a widely circulated national newspaper as notice to any person or body corporate or financial institution who may have any interest in any of the said accounts to claim ownership of same within 14 days of the publication of the order and show cause why the proceeds in the account should not be permanently forfeited to the Federal Government of Nigeria.”

    Further hearing in the case was fixed for November 16.

    At the last count, the Central Bank (CBN) had issued 30,511,506 BVNs.

    The Nigeria Inter-Bank Settlement System (NIBSS) says  a total of  45.85 million bank accounts remain unlinked although  when compared with the active accounts the number stood at  15.72 million unlinked to BVN as at  February 2017.

    Even before the court order the CBN had issued a memo warning the banks and NIBSS, Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs) to ensure proper capturing of the BVN data and validate same before linkage with customers’ accounts; ensure all operated accounts are linked with the signatories’ BVN; and ensure customer’s names on the BVN database are the same in all of his/her accounts, across the banking industry.

    The CBN Director of Banking and Payment System, Mr. Dipo Fatokun, who signed the memo asked the 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 apex bank requires NIBSS to ensure BVN data are stored within the shores of Nigeria and shall not be routed across borders without the consent of the CBN while users of the BVN information shall establish adequate security procedures to ensure the safety and security of its information and those of its clients, which shall include physical, logical, network and enterprise security.

    The BVN was launched on February 14 2014 for the purpose of registering all customers in the financial system using biometric technology.

    Biometric technology involves the process of recording a person’s unique physical traits such as fingerprints and facial features.

    Each registered person is then given a BVN number that is unique to him.

    The objective according to the CBN is to protect bank customers, reduce fraud and further strengthen the Nigerian banking system.