CBN seeks to bar BVN violators from banking services

The Central Bank of Nigeria (CBN) has issued a revised regulatory framework for bank verification number (BVN) operations and watchlist for the Nigerian banking industry.

The apex bank, on Tuesday, said the move was in line with its mandate to promote financial system stability.

“This framework defines the operations of BVN as well as the establishment and operations of a watch-list for the Nigerian banking industry, to address the increasing incidence of frauds and to enhance public confidence in the banking industry,” the circular signed by Musa Jimoh, CBN’s director, payments system department, reads.

“This framework, without prejudice to existing laws, is a guide for the operations of the watch-list in the financial system. The watch-list is a database of customers identified by their BVNs, who have been involved in confirmed cases of breaches, as defined within the framework.”

Under the new framework, CBN said no new account/wallet (except Tier 1) shall be allowed to operate without BVN (except inflows) while any account/wallet (except Tier 1) without BVN shall be closed within 30 days.

The circular listed watch-list stakeholders to include the CBN, Nigeria Inter-Bank Settlement System (NIBSS), banks, other financial institutions and bank customers.

For customers who breach the BVN regulations and subsequently placed on the watchlist, such persons or organisations shall not be allowed to enter a new relationship with any participant including banks and other financial services providers.

Also, a participant may choose not to continue a business relationship with the account/wallet (except Tier 1) holder on the watch-list.

“Where a participant chooses to continue an existing business relationship with holders of account/wallets(except Tier 1) on the watch-list, the account/wallet(except Tier 1) holder shall be prohibited from all electronic channels such as but not limited to ATM, POS, Internet Banking, Mobile Banking, USSD including the issuance of third-party cheques,” the circular adds.

“However, inflows may be allowed, provided these are from legitimate sources.”

According to the circular, a customer with watch-listed BVN shall not reference accounts, access or guarantee credit facilities and shall remain on the watch-list for a specified period.

The CBN also mandated banks and other financial institutions involved in BVN operations to ensure all operating accounts/wallets (except Tier 1 (including accounts/wallets (except Tier 1) opened through agents) were linked with the signatories’ BVNs within 24 hours of NIBSS making BVN available.

It added that operators must “enroll all mobile money wallets (except Tier 1) subscribers on the BVN database and link their wallets (except Tier 1) with their BVNs within 180 days of the issuance of this framework.

“Ensure that BVN details of all signatories, directors and beneficial owners are linked to their respective non-individual accounts/wallets (except Tier 1). This is also mandatory for Non-resident Non-Nigerian Directors (NRNND) of corporate accounts.”

The CBN warned that the failure of participants to comply with the guidelines shall attract appropriate penalties.