CBN Provides Updates on BVN Rules, Discloses Penalties for Financial Institutions, Customers for Violation

CBN Provides Updates on BVN Rules, Discloses Penalties for Financial Institutions, Customers for Violation

  • In February 2014, CBN, in conjunction with the Bankers' Committee, implemented a centralized Bank Verification Number (BVN) System
  • This is part of a larger plan to ensure the success of Know Your Customer (KYC) principles and the promotion of a safe, dependable, and efficient payment system
  • The BVN system assigns a unique identifying number to each client in the Nigerian banking industry

The Central Bank of Nigeria has published an updated revised regulatory framework for Bank Verification Number(BVN) operations warning violators will be sanctioned.

According to the CBN, the framework specifies the activities of BVN, as well as the formation and operation of a Watch-list for the Nigerian Banking Industry, in order to combat the rising incidence of fraud and boost public trust in the banking industry.

The CBN announced this in a circular sent to all deposit money banks, mobile money operators, super agents, and payment service providers on Tuesday, October 12th, headlined 'Issuance of the new regulatory framework for Bank Verification Number operations and watch-list for the Nigerian banking industry'.

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BVN updates CBN
CBN building Source: CBN
Source: Twitter

Part of the circular which also has various penalities for infractions by participants reads:

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"Banks must guarantee appropriate collection of BVN data (including BVN acquired by their agents) and validation of the same before linking to clients' accounts/wallets."
"While customers must provide accurate biometrics and biodata. Customers role and responsibilities shall also include the reporting of any changes in their biometric (e.g. loss of a finger) and biodata."

Also, CBN said it would ensure all operated 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.

CBN added that operators must

“Ensure that BVN details of all signatories, directors, and beneficial owners are linked to their respective non-individual accounts/wallets (except Tier 1).”

What are the penalties?

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CBN revealed that N2 million fine for banks allowing customers operating an account without BVN the penalty also includes 15% of the total amount credited into the account during the period infraction exists and N20,000 penalty per infraction/customer per day after the infraction exists.

Also, banks will pay another 2 million for failure to capture customers’ biometrics and biodata in line with the BVN Framework.

While for failure to report customers’ BVN for watch-listing financial institutions will pay N200,000 penalty per infraction/customer.

"Failure to correctly report the BVN of deceased customer will be N100,000 penalty per infraction/customer. While for not following due process in confirming and designating a customer as ‘DECEASED’ N20,000 penalty per infraction/customer per day after the infraction exists."

Penalty customers

For customers on BVN watch list, CBN said:

"A customer with watch-listed BVN shall not reference accounts, access or guarantee credit facilities."

Update on BVN

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The federal government has stated arrangements are ongoing to replace the Bank Verification Numbers (BVN) with the National Identity Numbers (NIN). gathered that Isa Pantami, the minister of communications and digital economy, has briefed President Buhari on the need to replace BVN with NIN.

The minister added that he had also briefed the National Economic Sustainability Committee headed by Vice President Yemi Osinbajo on the imperative of replacing BVN with NIN.


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