CBN: BVN Is To Protect Customers’ Deposits

• To Be Repeated In 10 Years
• Promises Special Window For Diaspora Nigerians

The Central Bank of Nigeria(CBN), which soft pedaled on its June 30 deadline for banks account holders to be Bank Verification Number(BVN) compliant, has said the exercise will be repeated every 10 years.

The apex bank announced during the week that only a little above 14 million people complied with the BVN registration requirement, which commenced since last year, necessitating the extension of the deadline till October.

Alhaji Muazu Ibrahim, the (CBN) director of corporate communications, explained that there was a world of difference between the Nigeria Uniform Bank Account Number (NUBAN) exercises, which till date cut off some bank customers from their accounts for failure to comply and BVN. Their accounts became inoperable with the current BVN, which is primarily intended to protect customers’ deposits, through their identities.

He said account holders may continue to operate their account if they failed to be BVN compliant, adding that their failure will only deny them of some certain privileges like Internet banking and new credit.

On the fears expressed by Nigerians in diaspora, he said the apex bank was working on another window of opportunity to enable them undertake the BVN exercise. Other group of Nigerians, including the sick and the aged at home that may not be able to meet the deadline will also benefit from the special window.

Pointing out the difference between the NUBAN exercise of four years ago, he said, “The Nigeria Uniform Bank Account Number (NUBAN) was a unique 10-digit Bank Account numbering system, which is simpler to use than traditional longer account numbering structures and it is in line with requirements of the West Africa Monetary Institute for the economic integration of ECOWAS countries. The numbering system was just for the financial institutions to help them quickly identify banks and branches, because each bank branch has a unique numbering. That is why now with the NUBAN, if you want to do a transfer, nobody would ask you for a branch or code because the NUBAN has taken care of that and it make transfers easier within the financial institutions.”

But the BVN is about the customer himself, his identity, all tended towards his deposit protection, so that nobody can fraudulently operate his account. Secondly, it is aimed at exposing bad customers, who move from one bank to the other with different identities to perpetrate all manner of evils. With the BVN in place such people will no longer have the space to operate in the Nigerian financial or banking institutions.

“ Now, for the diaspora Nigerians, there is an arrangement in place, through the collaboration of the Central Bank of Nigeria ( CBN); the Nigerian Interbank Settlement System ( NIBSS) and a consultant, who is working on a platform to enable them undertake their registration offshore and for those who are indisposed at the moment. There is always room for exception. The bank would provide another window of opportunity to enable them carry out their BVN registration,” he said .

With the extension, the CBN spokesman said as from October, bank depositors that failed to be captured under the exercise may be denied some services or privileges they enjoy now. This include the denial of electronic banking from the comfort of their offices or homes or when they go shopping and new bank credit.

“It would not stop them from operating their accounts, but if they want to do any banking transaction, they have to go to the bank personally. But no bank can grant them any new credit without the BVN registration,” he clarified.

Only penultimate week at the last Bankers’ Committee Meeting held in Abuja,  the Chief Executive Officer of UBA Plc, Mr. Philip Oduoza told journalist that the Committee had resolved that no new credits should be granted to customers, whose identities they could not verify in view of increasing non performing loans.

He added that the cashless payment system piloted in some select states of the country has proved very successful within the six months operational period, adding that the strategy is to be launched  nationwide by the third quarter of the year.

The absence of a unique identifier in the Nigerian banking industry has been a major challenge inhibiting the effectiveness of the ‘Know Your Customer” (KYC) principle, with negative consequences on the growth of credit cards and other credit-related products. 

To complement the existing means of identification 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 Bankers’ Committee last year, launched a centralized biometric identification system for the banking industry, tagged Bank verification Number (BVN).

The Bank Verification Number (BVN) project is an initiative aimed at protecting bank customers and further strengthening the Nigerian banking system.
Meanwhile, Nigerians have expressed appreciation to the management of CBN for being responsive to the plight of millions of Nigerians, who could have been deprived the opportunity of registration , if the deadline was not extended

A trader at Balogun Market, Lagos said she was grateful to the CBN for the extension, adding that she was already contemplating closing down her account with one of the commercial banks next week

“I have not been able to go to the bank to do this thing they are talking about. You can see how people have been coming and going. So they want me to just go like that? Since last month when people started talking about this thing, I have stopped depositing money in the bank. I have been putting all my sales back into the business and I planned to just close the account and open another one after the registration. That time, they will be forced to do the thing for me immediately.

But Dele Lawal, Otunba Taiwo and Sade Olugbade, who called from the United States said they are waiting ansciously for the special window promised by the CBN. They are among the numerous Nigerians living abroad, who have expressed fears that the exercise might exclude them from the banking operations in the country.

Meanwhile, a pro democracy non government organisation, Human Rights Writer Association of Nigeria  (HURIWA ) has described the deadline for the BVN exercise as “ illegal and arbitrary,” and asked the CBN to make the exercise continuous and permanent so as to relieve Nigerians of untold hardship.