CBN Moves to ban BVN violators from bank transactions

Godwin Emefiele
Godwin Emefiele

The Central Bank of Nigeria (CBN) has announced it is embarking on a revised regulatory framework for bank verification number (BVN) operations and watchlist for the Nigerian banking industry. The move by the apex bank is in line with its mandate to promote financial system stability.

A circular signed by Musa Jimoh, CBN’s Director, Payments System Department, reads, “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.”

“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.”

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.

Meanwhile, bank customers on the watchlist will not be allowed to bank or engage with service providers in the financial services sector.

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.

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