Customers, Banks In A Ding-Dong Over BVN Deadline

The Central Bank of Nigeria, through the Bankers’ Committee and Nigeria Interbank-Settlement System (NIBSS), had introduced the Bank Verification Number (BVN) project in February 2014, with the aim of ensuring unique identity for all bank customers and other users of financial services in the country.

The process, which required individual banks to capture the biometrics and facial marks of each customer, would subsequently be aggregated at the NIBSS centralised platform, to serve the industry as a whole. But to arrive at this point, a customer with accounts in more than one bank would only need to be captured in the biometric exercise once and when the unique identity number (BVN) is given, the customer would go to other banks where he/she has accounts to link them with the number.

The project, described as a “silver bullet” to taming the multifaceted banking frauds in the country, was specifically scripted to identify a customer based on physiological or behavioural attributes like fingerprint, facial features, signature and unique number. It was first faced with the challenge of who is in charge or control of data captured among government agencies. It was also beset by criticism over assessed duplicity of the same exercise by other government agencies.

At the expiration of the initial 18 months after the launch (June 30, 2015), which the regulator also warned of possible sanctions for non-compliance, bank customers numbering in millions appeared reluctant in registering, but in a last minute rush to get registered, there were commotions and stampede in banking halls across the country. That necessitated the call for the extension of the deadline by four months to October 31, 2015.

The Managing Director of NIBSS, Ade Shonubi, said the exercise, while strategic to the economy, is also important to banking industry operators, as banks have invested more than N8 billion in the entire processes so far.

Several challenges that necessitated the approach, which stakeholders said is innovative, include electronic fraud, multiple identities and dubious transactions with accounts that lack adequate Know-Your-Customer principle.

Presently tensions are mounting among banks’ customers over the fate of their accounts, as some are yet to be registered in the exercise; others have registered but cannot access their accounts; while millions that have registered are yet to link their other accounts; still many that have linked their various accounts are still complaining of transactional and access hitches to their accounts.

Few days to the deadline, CBN mandated all banks and licensed Bureaux de Change (BDCs) operators to demand for BVN, as part of the requirement for the sale of foreign exchange to their customers.
Already, this has generated a new controversy some customers are now reluctant in disclosing their BVN to authorised dealers and buyers because of claims that there are attendant risks to the disclosure.

But the Director of Corporate Communications Department, CBN, Alhaji Ibrahim Mu’azu, said the adoption of BVN as a condition for the purchase of foreign exchange is expected to reduce the incidence of multiple purchases, round tripping and illicit transfer of funds, facilitate enforcement of authorised limits of forex sales to end users, sanitize the retail segment of the market and engender policies that will facilitate better allocation of the forex, based on genuine demands.
“The BVN is neither a payment instrument nor an account number and therefore, could not be used to access any account by unauthorised users. The banks, BDC operators and even regulators use the BVN to validate the identity of a customer using some biometric information such as finger prints and photograph obtained at the point of enrolment.
“The BVN provides the unique identity of each customer for the purpose of achieving effective KYC principle and fraud prevention. The provision of BVN by customers at the point of forex purchase or for any legitimate banking transaction with any of the above named institutions does not attract any security risk.  Rather it protects the customer against identify theft,” he said.

Earlier, there was concern that the verification of the BVN before forex transactions is consummated would bring tardiness and delay in the process.

But in a seeming quick response, NIBSS unveiled a code- *565*0#, a short code that is operational in Etisalat, MTN and Airtel networks, with the mobile phone number submitted during the registration, which would instantly receive status confirmation at the cost of N20.

Since October 31, when the second deadline for “voluntary” compliance was concluded, banks have been enforcing the sanctions, which is basically blocking of access to the account until the account holder complies. Still, more worries have emerged over complaints of non-account linkage, even weeks after compliance.

Mu’azu had said that  “while it can be said that some substantial efforts have been made in terms of enrollment and successes recorded, what is left therefore, is for the remaining account holders to get their accounts linked to BVN.
“The point needs to be stressed here that it is not enough to just enroll for BVN. The process is duly concluded only when all accounts owned by bank customers are linked to their respective BVNs.”

According to the Nigeria Interbank Settlement System (NIBSS), about 14.4 million accounts or little above that in the last few days have only been linked among the over 50 million active accounts in the industry.
CBN had estimated that given the assessed tradition of multiple accounts’ holding by average Nigerian, which was put at two or three per account holder, there might be over 50 million active accounts that possibly have been involved in the BVN project.

But lamentations have marred the take off of BVN in banking transactions, with some banks’ customers baring fangs over the lack of connectivity after they had long gone through the process of completing the BVN registration.

The NIBSS spokesperson, Lilian Phido, said her agency, which hosts the platform for the project, is not to blame and advised that “customers should go back to their respective banks to sort it out. The linking is done at the bank. Once they contact the platform, you can be sure that it will be linked and the customers would have unhindered access to their accounts.”

However, it still looks gloomy at the moment for many Nigerians in the Diaspora, who number in tens of millions, as they continue to search and wait for identifiable and nearest centre to register for the unique code.
Presently, there are only 12 countries beside Nigeria (United Kingdom, United Arab Emirates, South Africa, Malaysia, China, United States of America, Canada, France, Italy, Brazil, India and Australia) where the exercise is ongoing, with 21 centres cumulatively.

So far, there is estimated 12,000 Nigerians in Diaspora that have taken advantage of the BVN registration centres created outside the country.
But Mr. Ken from Atlanta, United States of America, he said that he has assumed the role of the Central Bank of Nigeria over there, campaigning and organising other Nigerians in readiness for any identifiable centre to no avail.
“The last time we heard about an address in Atlanta, it almost became a scene and we were more disappointed by the fact that nobody for that purpose was found there,” he said.

The noble objectives articulated in BVN initiative has “set sail” and can only reach the desired destination with cooperation, collaboration and sustainability in view from all the stakeholders. The initial hitches are real, but should not be a surprise. The surprise would however, be the response from the regulatory authorities. Whatever, everything about BVN deserves the support of all.