There has been a fuss over the recent order by the Central Bank of Nigeria, CBN on commercial banks to impose a “post no debit” restriction on accounts without Bank Verification Numbers, BVN and National Identification Number, NIN.
The apex bank in its directive, slated April, 2024 for the order to take effect, preventing affected customers from making withdrawals, transfers, or any other debits from their accounts as this will effectively freeze the funds in the account, rendering it inaccessible for the duration of the restriction.
In a circular jointly signed by the Director, Payments System Management Department, Chibuzo Efobi, and Director, Financial Policy and Regulation Department, Haruna Mustapha, the Central Bank also stated that all the BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024.
“Accordingly, the CBN hereby issues an amendment to Section 1.5.3 of the Regulatory Framework for Bank Verification Number Operations and Watch List for the Nigerian banking industry.
“In this regard: it is mandatory for all Tier-1 bank accounts and wallets for individuals to have BVN and/or NIN. It remains mandatory for Tiers 2 & 3 accounts and wallets for individual accounts to have BVN and NIN.
“The process for account opening shall commence by electronically retrieving BVN or NIN related information from the NIBSS BVN or NIMC’s NIN databases and for same to become the primary information for onboarding of new customers.
“All existing customer accounts/wallets for individuals with validated BVN shall be profiled in the NIBSS ICAD immediately and within 24 hRS of opening accounts/wallets.”
Continuing, the CBN said, “Effective immediately, no new Tier1 accounts and wallets should be opened without BVN or NIN,
“For all existing Tier1 accounts/wallets without BVN or NIN: i. Effective immediately, any unfunded account/wallet shall be placed on “Post No Debit or credit until the new process is satisfied.
“Effective April 1, 2024, all funded accounts or wallets shall be placed on “Post No Debit or Credit, and no further transactions permitted.
“The BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024.”
“To ensure uniform and full compliance, the Executive Compliance Officers, Chief Compliance Officers, or Heads of the Compliance Functions are advised to acquaint themselves with the attached Guidance Notes which becomes applicable to ALL institutions regulated by the CBN.
“Also, a comprehensive BVN and NIN audit shall be conducted shortly and where breaches are identified, appropriate sanctions shall be applied.
“Finally, all financial institutions regulated by CBN are required to apply strict compliance on restrictions on Tier1 accounts/wallets as they relate to limits on transaction values and cumulative balances.”
While the rationale behind this decision by the CBN has come into question by many, GlobalNet Media has learned that the directive was part of the apex bank’s efforts to promote financial system stability and strengthen the Know Your Customer procedures in all financial institutions as it has also amended Section 1.5.3 of the Regulatory Framework for BVN to ensure mandatory registration of all tier-1, 2, and 3 bank accounts and wallets with BVN or NIN.