In line with its objective of promoting financial system stability, the Central Bank of Nigeria (CBN) has issued a Revised Regulatory Framework for Bank Verification Number (BVN) operations and Watch-List for the Nigerian Banking Industry.
In a communique issued on Tuesday, the CBN said the framework enhances the effectiveness of customer due diligence and “know your customer” processes as part of the overall strategy for promoting a safe and efficient banking and payment system.
According to the circular signed by Musa Jimoh, CBN’s director, payments system department, the Watch-list is a database of customers identified by their BVNs, who have been involved in confirmed cases of breaches.
Under the new framework, breaches on the part of the customer could see the individual getting barred from entering a new relationship with any participant (banks).
Where a financial institution chooses to continue an existing business relationship with holders of an account/wallets on the watch-list, the account 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”.
However, inflows may be allowed, provided these are from legitimate sources.
The new framework further stipulates that a customer with watch-listed BVN shall not reference accounts, access or guarantee credit facilities.
As defined by the framework, breaches on the customer’s part include; use of forged documents; forgery; compromise; complicity and connivance.
Also included in the list of breaches are; duplicate enrolment, use of fictitious information, receipts of proceeds of deception, deception, receipts of fraudulent proceeds and any infractions on AML/CFT laws, and dishonest acts.
Others listed are; non-cooperation with efforts (as stipulated in the Regulation on Instant Interbank Electronic Funds Transfer) to reverse wrong credit, erroneous, multiple or duplicated payments or credits; and any infringement of the Cybercrimes (Prohibition, Prevention, etc.) Act, 2015.
Those who misuse identity and financial information, indulge in identity theft and breach of confidentiality will be punished in line with the new regulations.
The CBN will also punish customers for falsification, concealment of relevant information, conspiracy, extortion, false representation and any other fraudulent infraction.
Banks and other financial institutions involved in BVN operations were mandated by the CBN to ensure all operating accounts/wallets were linked with the signatories’ BVNs within 24 hours of NIBSS making BVN available.
The instruction also noted 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 communique partly read.
The CBN said it will continue to monitor industry developments and issue further guidance as may be appropriate.