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CBN gives banks 30 days to close accounts without BVN
The Central Bank of Nigeria (CBN) has given banks and other financial institutions a 30-day grace period to close Non-Bank Verification (BVN) accounts.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) showed that as of April 8, 57.39 million customer accounts were linked to their BVN.
A review of the “Regulatory Framework for Bank Verification Number (BVN) Operations and Watch List for the Nigerian Banking Industry said the move was driven by the requirement for Know-Your-Customer (KYC) and Customer's-Due-Diligence efficiency. principles and promotion of safer, more reliable and efficient banking and payment systems.
The policy was also intended to address the growing incidence of fraud and increase public confidence in the banking industry and to provide guidance for BVN operations and watch list activities of financial institutions in Nigeria.
As part of the policy implementation plan, the CBN has directed banks to link the customer's BVN to related accounts/wallets (except Tier 1).
This requires using the customer's BVN generated after his/her registration to link the accounts/wallets of which he/she is a signatory after verification.
"No new account/wallet may operate without a BVN (except for tributaries), however any account/wallet without a BVN must be closed within 30 days," the framework said.
It stated that disconnecting BVN customers from accounts/wallets includes removing the BVN signatory (excluding directors/beneficial owners) linked to the account/wallet.
The CBN said the BVN will be disconnected after approval by the chief executive of the audit of the customer's bank.
“This cancellation applies to corporate or joint accounts and activities unrelated to the breach. Refunds to disconnected accounts/wallets (except Tier 1) will be forwarded to the Director of Payment System Administration on a monthly basis,” he said.
Also, “If there is no linked account, zero report should be made, while fraud management is a process aimed at using BVN to deter, prevent, detect and mitigate the risks of fraud in the banking industry,” he added.
Individuals on the watch list are prohibited from entering into a new relationship with any bank. Vrcholová banka stated that in a situation where the bank decides to continue the business relationship with the account holder on the watch list, the account holder will be prohibited from using electronic channels, issuing third-party checks, and may not refer to another. The customer will not be granted access to a credit facility or a guarantee loan.
Individuals will also remain on the watch list for up to 10 years and have their accounts subject to the penalties that apply to them.
“Once a BVN on the Watch List completes its tenure on the Watch List, the Nigerian Interbank Settlement System (NIBSS) will automatically remove the BVN and inform stakeholders accordingly. If the bank realizes that a person has been included in the watch list by mistake, the bank will apply in writing, together with supporting documents, to the Director of the Risk Management Department of the CBN for approval to be removed from the list,” the bank said.
The documents must be duly approved by the MD/CEO and the chief auditor of the bank. After approval from the CBN, the bank will forward the approval to NIBSS for decommissioning. Only the institution that placed the person on the watch list can request such exclusion.
According to the framework, it is the CBN's responsibility to supervise BVN operations and systems, monitor other stakeholders to ensure compliance, issue circulars to regulated institutions on Watch-List operations, evaluate the framework for Watch-List operations. -Indicate as necessary and apply appropriate sanctions for non-compliance with the regulatory framework.
NIBSS is expected to work with other stakeholders to develop and revise BVN standard operating guidelines, initiate revision of guidelines if needed subject to CBN approval, ensure smooth operation of BVN system, maintain BVN database, ensure adequate security of BVN information ; maintain an online portal with a real-time watch list.
