As from August 1, all customers without Bank Verification Number (BVN) linked to their bank accounts will not be allowed to make withdrawal from those accounts, says the Central Bank of Nigeria (CBN).
According to the apex bank, the measure becomes necessary as the absence of a unique identifier in the banking industry is a major challenge inhibiting the effectiveness of the Know Your Customer (KYC) principle.
In a letter to all Other Financial Institutions (OFIs) by its Director, OFIs Supervision Department, Mrs. Tokunbo Martins, obtained from CBN website on Monday, the apex bank stated that it has become necessary to extend the BVN enrolment to customers of OFIs, especially as some OFIs are located in the rural areas and have customers that may not have enrolled with commercial banks.
“In view of the foregoing, all OFIs are required to enroll their customers on or before July 31, 2017; conspicuously display notices sensitising customers on BVN in the banking hall; ensure that all new customers have BVN and forward to the Director, OFIs Supervision Department schedule of customers’ accounts with BVN on Auguast 7, 2017,” the circular stated.
Enumerating the benefits of BVN enrollment to both customers and the banking sector, Mrs. Martins said: “The BVN is expected to minimise the incidence of fraud and money laudering in the financial system as well as enhance financial inclusion. The BVN enrollment will support the achievement of the zero default credit targets set for the Participating Financial Institutions (PFIs) in the Micro, Small and Medium Enterprises Department Fund (MSMEDF). It will also open opportunities for credit to millions of Nigerians without a standard means of identification.”
Going down memory lane on the history of the BVN, she stated: “To address this challenge (absence of a unique identifier) and complement the existing means of identification of customers, which include driver’s licence; international passport; National Identity Card and the Permanent Voter’s Card, the CBN, in collaboration with the Bankers’ Committee, launched the BVN project in February 2014. The implementation of the BVN initiative, which started with the customers of Deposit Money Banks (DMBs) has been very successful. However, to avoid a broken identification link in the banking system, it has become necessary to extend the BVN enrolment to the customers of OFIs, especially as some OFIs are located in the rural areas and have customers that may not have enrolled with the DMBs.”