The Central Bank of Nigeria (CBN) has issued a revised regulatory framework for bank verification number (BVN) operations and watchlist for the Nigerian banking industry.
The apex bank, on Tuesday, said
the move was in line with its mandate to promote financial system stability.
“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,” 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.”
Under the new 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.
For customers who breach the BVN
regulations and subsequently placed on the watchlist, such persons or
organisations shall not be allowed to enter a new relationship 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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