Central Bank of Nigeria (CBN), has given Banks and other financial institutions 30-day ultimatum to close accounts without Bank Verification Number (BVN).
The directive was given following demand for effectiveness of Know- Your-Customer (KYC) and Customer’s-Due-Diligence principles, and promotion of more safe, reliable and efficient banking and payment systems.
It is also expected that it would address increasing incidence of frauds and to enhance public confidence in the banking industry and provide a guide for BVN operations and watch-list activities carried out by financial institutions in Nigeria.
The statement added; “No new account/wallet shall be allowed to operate without BVN (except inflows), however, any account/wallet without BVN shall be closed within 30 days.
“This delinking is for corporate or joint accounts and for activities not associated with breaches. Returns on delinked accounts/wallets (except Tier 1) shall be rendered to the Director, Payments System Management Department on a monthly basis.
“Where there is no linked account, a nil report should be submitted while fraud management is a process aimed at using BVN to deter, prevent, detect and mitigate the risks of fraud in the banking industry.”
A watch-listed individual is barred from entering into new relationship with any bank. The apex bank said that in a situation that a bank chooses to continue business relationship with an account holder on the watch- list, an account holder shall be prohibited from e-channels, issuance of third-party cheques, shall not provide reference to another customer, shall not be allowed to access credit facility or guarantee credit facilities.
Also, individuals shall remain on the watch list for up to 10 years and penalties that applied to such shall apply to their accounts. The statement added;
“Once a Watch-Listed BVN has served its term on the Watch-List, the Nigerian Interbank Settlement System (NIBSS) shall automatically delist the BVN and notify the stakeholders. Where a bank realised that an individual was placed on the watch-list in error, the bank shall apply in writing, with supporting documents to the Director, Risk Management Department of the CBN, for approval to delist.”
The supporting documents shall be duly authorised by the MD/CEO and the Chief Audit Executive of the bank. Upon approval from CBN, the bank shall forward the approval to NIBSS for delisting. Only the institution that placed an individual on the watch-list can request for such delisting.
The new framework added that it is the responsibility of the CBN to conduct oversight on BVN operations and systems, monitor other stakeholders to ensure compliance, issue circulars to regulated institutions on the operations of the Watch-List, review framework for the operations of the Watch-List, as the need arises and apply appropriate sanctions for non-compliance with the Regulatory Framework.
The NIBSS is expected to collaborate with other stakeholders to develop and review the Standard Operating Guidelines of the BVN, initiate review of Guidelines, as the need arises, subject to the approval of the CBN, ensure seamless operations of the BVN system, maintain the BVN database, ensure adequate security of the BVN information; an maintain an on-line real-time Watch-list Portal.
