The Central Bank of Nigeria (CBN) has announced a revised regulatory framework and watchlist for bank verification number (BVN) activities in the Nigerian banking industry.
The action, according to the CBN, was made in order to fulfill its responsibility of promoting financial system stability.
“To address the increasing incidence of frauds and to enhance public confidence in the banking industry, this framework defines the operations of BVN as well as the establishment and operations of a watch-list for the Nigerian 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.”
According to the new framework, no new account/wallet (except Tier 1) will be allowed to operate without BVN (excluding inflows), and any existing account/wallet (except Tier 1) would be closed within 30 days if it does not have BVN.
The CBN, the Nigeria Inter-Bank Settlement System (NIBSS), banks, other financial institutions, and bank customers are among those on the watch-list, according to the circular.
Customers who violate the BVN standards and are subsequently placed on the watchlist are not permitted to form new relationships 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.
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