August 7: Clampdown on Non BVN Accounts

The Biometric (Bank) Verification Number regime has variously been described as a revolution that has come to stay as one of the measures put in place by the Central Bank of Nigeria to among many things, check banking fraud, which include, but not limited to money laundering.

In 2013, when the idea of BVN was muted by the former President Goodluck Jonathan’s administration, not many understood the intention or the efficacy of the proposed plan. To some, it was another way for the bank to continue to make banking more stringent and cumbersome for the banking public, and of course, selfishly rake in more revenue for the industry while to make others, it was another terms and conditions written at the back of every bank document that are never understood but signed anyway.

In 2014, therefore, measures were put in place to persuade Nigerians to get registered and get a ten digits number to would be linked to all their accounts irrespective of how many accounts owned, or how many banks they are domiciled in, and so the rush for registration started though initiated on a very low scale as awareness was on not a priority.

The slow response of registration prompted the CBN to extend registration to another three months from June 30, 2015 to October 31 to avail thousands of Nigerians the opportunity to participate in the exercise.

The Apex Bank had vowed not to extend the deadline made as non-registered bank customers would be barred from accessing their money or any transaction in their account, but that was not to be as information gathered from an official of the apex bank says about 26 million bank customers would be affected by the shut-out.

It was learnt further that although registration window would still be opened, but unregistered customers would not be allowed access to their accounts.

The official, who claimed that the exact figures of registered bank customers would not be ready yet, however, lamented that “less than half of total bank customers have been captured.

At the time, Managing Director, Ecobank Nigeria Plc, Jibril Aku, had threatened that bank customers who failed to meet the October 31 deadline to enroll on the BVN network will have their accounts frozen.

He spoke at the end of the 324th meeting of the bankers’ committee in Lagos, maintaining that there was no going back on the new deadline set by CBN for customers to obtain their BVN.

But all the threats were not to be as there was yet another one month extension to November 30, 2015.

Meanwhile, a statement from the banking industry regulator, said some fraudsters have started sending unsolicited mails and text messages to bank customers alerting them to the deactivation or suspension of their bank accounts due to uncompleted BVN registration process as well as directing them what next to do.

The statement, signed by the Director of Communications Department, CBN, Alhaji Ibrahim Mu’azu, read in part:

“An example of such messages reads thus: ‘Dear customer, due to the new BVN policy by the CBN, your account has been deactivated and to reactivate, call……”

CBN said those messages were intended to lure bank account holders to reveal their personal details with which the fraudsters could use to defraud them, and warned against responding to such messages.

Again, the CBN has come out to intimate the banking public that with effect from August 1, 2017, customers without Biometric Verification Number (BVN) linked to their account will not be allowed to make withdrawals from those accounts.

The Director, Other Financial Institutions Supervision Department, Mrs. Tokunbo Martins, disclosed this in a circular to Other Financial Institutions (OFI), adding that BVN Initiative, which the apex banking regulating body started with Deposit Money Banks (DMBs) customers, has been successful. She noted that due to broken identification link in the banking system, it became necessary to extend the BVN enrolment to the customers of OFI, especially those located in the rural areas of the country, and have customers that may not have enrolled with the DMBs.

According to her, the BVN enrollment will support the achievement of zero default credit targets set for the participating Financial Institutions (FPIs) in the Micro, Small and medium Enterprises Development Fund (MSMEDF).

“It will also open opportunities for credit to millions of Nigerians without standard means of identification,” she explained.

She highlighted that OFIs are required to enroll their customers on or before July 31, 2017; conspicuously display notices sensitising customers on BVN in the banking hall; ensure that all new customers have BVN and forward to the Director, Other Financial Institutions Supervision Department schedule of customers account with BVN on August 7, 2017.

She explained further that the absence of identifier in the banking industry has been a major challenge inhibiting the effectiveness of the Know Your Customers (KYC) principle.

“To address this challenges and complement the existing means of identifications of customers, which include; the Driver’s License; the international/passport; the National identity card; and the permanent Voter’s card; the CBN, in collaboration with the banker’s Committee, launched the BVN project in February 2014.

“The BVN is expected to also minimise the incidence of fraud and money laundering in the financial system, as well as enhance financial inclusion,” she added.

With the new July 31, 2017 deadline, it is not known whether Nigerians, who are known to be interested in last minute rush, will take advantage of the over three months liberty period.

Banks should therefore ensure that any depositor or withdrawing customer who walks into the bank is compulsorily made to obtain his BVN status before his transaction is attended to. That way, according a senior official with Access Bank, “every Nigerian will be made to have his number before the given date”. He noted that there is no way a serious banker will not enter a banking hall for one banking reason or another within the three months period.

So for owners of non BVN accounts, the count starts now; going, going …

You will recall the CBN issued a circular stipulating that any bank customer without the BVN would be deemed to have inadequate KYC, effective November 1, 2015. The Bank also clarified that Nigeria resident’s bank account without the BVN would be operated as “NO CUSTOMER INITIATED DEBIT’’ account, until the account holder obtain and attach the BVN to the account.

It has however come to our notice, that some customers could not link their BVN to their accounts, due to discrepancies between the record on the BVN database and the records on the core banking applications of the DMBs. Such customers approached their bankers for correction, but some of the banks could not effect the corrections.

In view of this, it has become imperative for the CBN to issue the following clarifications;

1. Corrections of date of birth on BVN record should be allowed once, with supporting documents, evidencing the correct date of birth.

2. Change of names due to marriage should be allowed with supporting documents, such as marriage certificate/affidavit, etc.

3. Minor correction of names, due to misspelling e.g. Osikoya written as Oshikoya, should be allowed, with supporting document such as international passport, showing the correct name.

4. Change of names that are totally different (e.g. Ezra Abu changing to Aminu Umar0 or partially different (e.g. Ezra Abu Jide to Ezra Abu Olubaje) should only be allowed after customer has produced supporting documents to the change of the name, and this should be reported to the Nigerian Financial Intelligence Unit (NFIU) as a suspicious transaction, by the banks

5. The customers of the BVN database should be same in all his/her accounts, across the banking industry.

6. Customers that wish to close their accounts should be allowed to do so. Where the account is not linked with the BVN, a payment instrument should be issued in the name in which the account was opened. In case where the balance on the account is more than what is legally allowed on a paper instrument (i.e. #10million) the bank should seek for and obtain clearance for the EFCC (NFIU) before the account can be closed and the balance transferred electronically to another account.

7. Where the bank raises suspicious on the activity on its customers, Suspicious Transaction Report should be filed with the Nigerian Financial Intelligence Unit.

8. Timeline for the resolution of BVN issues shall be 5 working days from the customer submits all the required documents.

Please be guided and ensure strict compliance.