₦airaland Forum

To strengthen the battle against money laundering in Nigeria, the Central Bank has directed that all bank customers must link their Bank Verification Number (BVN) and/or National Identification Number (NIN) with their bank accounts before March 1, 2024. This new directive will put pressure on bank employees,

[quote]At the Financial Action Task Force plenary held late October in Paris, France, Nigeria failed to scale a review of Money Laundering and Terrorism Financing Risk conducted by the global financial intelligence agency.

The global agency faulted Nigeria’s anti-money laundering war, which had landed the country on the international grey list in February alongside South Africa, and 20 other countries.

Although the Nigerian Financial Intelligence Unit said it had been working to meet the FATF recommendations on money laundering and terrorism financing, it did not scale the review carried out by the FATF at its last plenary.

Countries on the FATF grey list have been identified as having strategic deficiencies in their anti-money laundering, terrorist financing, and proliferation financing regimes. According to KPMG, the implications for the greylisting of two of the biggest economies in Africa may be far-reaching.

Concerning Nigeria, KPMG said that “FATF noted that although Nigeria had made some progress since the adoption of its Mutual Evaluation Report in August 2021 it is required to implement FATF’s action plans. This FATF greylisting adds another layer of risk and complexity to businesses that already perceive Nigeria as a high-risk country for anti-corruption and other financial crime risks. This may put businesses with connections to Nigeria under more regulatory scrutiny, as regulators may expect them to implement more stringent AML/CFT compliance measures to mitigate the risks associated with greylisting.”

Also, the greylisting may result in higher compliance costs and increased due diligence requirements for businesses, making transactions with Nigerian counterparties more difficult.

A key component of the anti-money laundering requirement of FATF is Know Your Customer, which helps financial institutions verify the identity of new and existing customers.

In a bid to get the country off the greylist, the Central Bank of Nigeria on Friday directed all commercial banks to bar customers without Bank Verification Numbers and National Identity Numbers from having access to their accounts from March 1, 2024, by putting a ‘Post No Debit or Credit’ restriction on such accounts.

The circular with reference PSM/DIR/PUB/CIR/001/053 was jointly signed by the Director of the Payments System Management Department, Chibuzo Efobi, and the Director of Financial Policy and Regulation Department, Haruna Mustapha.

The apex bank said the directive was part of efforts to promote financial system stability and strengthen the ‘Know Your Customer’ procedures in all financial institutions.

It also amended Section 1.5.3 of the Regulatory Framework for Bank Verification Number to ensure mandatory registration of all Tier-1, 2 and 3 bank accounts and wallets with BVN or NIN.

The circular read, “As part of its efforts in promoting financial system stability, it becomes necessary to strengthen the Know Your Customer procedures in financial institutions under the purview of the Central Bank of Nigeria.

“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 BVN has been an integral part of identity verification in Nigeria, especially for financial services businesses, since it was introduced in February 2014.

The CBN further directed all executive compliance officers, chief compliance officers, or heads of the compliance functions to acquaint themselves with the attached guidance notes to ensure full and uniform compliance with the threat of sanctions hanging on them.

The circular said, “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 the CBN are required to apply strict compliance on restrictions on Tier-1 accounts/wallets as they relate to limits on transaction values and cumulative balances.”

The PUNCH gathered that Tier-1 accounts were the major source of concern where discrepancies in information were involved. A Tier-1 account refers to a bank account that can be opened with minimal or without any form of documents. This account can be opened with a passport photograph. The account has a limit of N50,000 deposits and an operating balance of N200,000 and N300,000.

The Executive Director of, Centre for the Promotion of Private Enterprise, Muda Yusuf, reacting to CBN’s latest directive, stressed the need for a digital database to harmonise all information of every citizen.

He said, “The country should have an organised database, and some of the new government officials have indicated plans to put together a framework to harmonise all these databases all over the place.

According CPPE boss, the NIN is the central database under which all other things will be centralised.

“The Know Your Customer policy is one of the effective ways to stop the flow of illicit funds because there are a lot of things going on in the economy. Some of which are also disrupting and affecting the effectiveness of policies.

“If we don’t have this proper database, the illicit funds will continue to create problems for the economy and we need to clean up the space.

“So for the CBN, there must be a way to coordinate these things and get the data seamlessly without necessarily asking people to come around to authenticate and stop creating problems for citizens physically,” he remarked.

In his reaction, the newly-elected President of the Association of Mobile Money and Bank Agents in Nigeria, Fasasi Sarafadeen, said “We are in support of the policy but the implementation and the urgency is going to create a crisis for the country.

“It is going to throw people into hardship. We are calling on CBN to meet with stakeholders and solve all the access issues so that we can spread this over a year for to customers to regularise. You don’t need to freeze their accounts; you only need to instruct your service providers that they should link the NIN of their database. “Retrieve their customers’ NIN from NIMC and retrieve their BVNs from NIBSS and marry the two. You don’t need to inflict punishment on the masses of the people.”

A financial analyst, Brain Essien, stated that while the circular is not an entirely bad idea, it was not a novel one, especially given that a few years back, the CBN issued a similar directive.

“Is the CBN telling us that the circular they released way back then on this matter was not acted upon or enforced by their regulatory department? If so, why not? This invariably reflects badly on the central bank as we should be way past this hurdle by now! Also, if our Money Deposit Banks and other banks have been managing bank accounts on behalf of customers without said verification processes as BVN or NIN information, should they, the banks, not have been punished for such negligence by now?” he quizzed.

Making a case for improved adoption of technology, Essien asked, “Our banks spend a lot of money, as gleaned from their quarterly financials, on technological upgrades, advancements and maintenance. They should put these to good use and not overburden their lowly paid staff due to their negligence in pursuing due diligence, with laborious and non-profiting assignments.”

Speaking with The PUNCH, the Chief Responsibility Officer of Peculiar Innovative Consulting, Segun Aremu, also welcomed the initiative, stating that it would strengthen Nigeria’s financial system.

“Our financial system thrives on the integrity of our information. This circular that has come out will help to strengthen the fight against money laundering. Money laundering thrives on information asymmetry because someone can open 10 accounts with 10 different names where no data connects the person to the accounts. That is why you see the NIN coming to play here.

“Every single person in Nigeria is expected to have NIN and if you have a BVN, it is easily traceable anywhere you are in the world and the number of accounts you have. It helps to check money laundering and deepen our financial system,” he noted.

A senior official of a Tier-1 bank in Lagos told The PUNCH that the directive would sanitise the industry although it would exert considerable pressure on the banks.

The official said, “Many customers are careless by ignoring the directive to link their BVN to their accounts. With the directive of the CBN, they will now be rushing to get their BVN so that their accounts will not be frozen.

“Many banks will find it difficult to cope with the anticipated rush as we have lost several key employees to the Japa syndrome. Besides, the banks had embarked on staff rationalisation to keep the operating expenses low.”

A branch manager of a new generation bank also said if the rush of customers without BVN and NIN was too much, the lenders would have no choice but to extend the working hours for its employees and might consider working on Saturdays and Sundays to clear the backlog.

The apex bank’s circular also elicited varied reactions on the popular social media platform, X, (formerly known as Twitter). An economy enthusiast who tracks the performance of Nigerian ministers every week, OpeOluwa (@OpeBee) stated that the timeframe for the implementation of the PND was okay as it would allow Nigerians in rural areas to regularise their accounts.

He said, “Most mobile banking customers especially those in rural areas don’t have BVN. The idea is to drive BVN registration (which will later be harmonised with NIN) in rural areas to expedite financial inclusion. Cardoso sabi ball.”

Reacting on X (formerly Twitter), Usman @Abiola_Usman said, “This new NIN requirement for account opening is tricky. It means that if I’m acquiring a customer, I’m doing a two-level check on BVN + NIN, and both have tokenisation (two OTPs), which means a longer onboarding time. Then, I will need a PII matching script somewhere to validate foundational KYC data.”

Another X user, Seun Odegbami, said: “Stressful for customers, especially those in the fintech space who are trying to acquire customers. Remember that they still have “TRUST” issues. So, how do they not to onboard easily? NIN wey get problem, or is it BVN that people are scared to give you? Sometimes.”

“So, they have so many accounts without no BVN before? This country na joke,” Stanley Junior noted.


While the stakeholders are still divided about the implementation of this policy, there is no doubt that the move would improve Nigeria’s anti-money laundering fight and possibly boost its chances of getting off the global grey list.

Source: https://punchng.com/CBNs-anti-money-laundering-fight-triggers-fresh-BVN-race-n-banks

When this bvn rubbish started, the only transaction I was allowed with my bank account was to deposit into it. I wasn't allowed to withdraw and transfer out of the account until after bvn registration.

I still don't understand this report. Is it that other bank customers have been freely conducting transactions with their bank accounts without bvn?

This is confusing..does it mean some persons are freely transacting without BVN after 8years?

Nothing concern me but E dey mind

CBN CBN CBN! I RESERVE MY COMMENT!

Who are these guys fooling? Are there any Nigerians with active account without BVN since 2014 it was introduced?

The only people who still have account without BVN are likely crook businessmen and politicians who bribed the banks.

No ordinary Nigerian can't create bank account without BVN, be it commercial or mobile banks.

So who are they fooling?

They should just have mercy on us

Lols,
Nothing seems to be working in this yeye country
Tueh! Obodo Ekwensu

So do they mean some nigerians are still conducting transactions in banks without BVN make I begin they swear for them now...

LeoDeKing:
When this bvn rubbish started, the only transaction I was allowed with my bank account was to deposit into it. I wasn't allowed to withdraw and transfer out of the account until after bvn registration.

I still don't understand this report. Is it that other bank customers have been freely conducting transactions with their bank accounts without bvn?

Yes, some banks have tier 1 accounts that have a limit of 50k and no ID is required. I think CBN is saying no to such practices.

soloehis:
This is confusing..does it mean some person are freely transacting without BVN after 8years?

that's naija for u, one law for d rich and d other for d poor, d law for d poor is a must

Wahala be like CBN

ok

I don't think it make sense anymore in this forum for people to criticize every action of Government. I'm sorry, we should just use our head when criticizing pls. Even if you don't like the Government of the day that doesn't mean what they are saying is out of point.

Meaning what?

My kids created Opay and Palmpay accounts without BVN and I was able to deposit and transfer funds into these accounts.

They have been using this account without BVN for more than 6months now.

Oluomo has no shame, the ifo he comes from has no presence of a councillor not to talk of a speaker. I don't know how these people sleep at night? Please they shouldn't stop at impeaching him, they should arrest him to account for all his past misdid.

LeoDeKing:
When this bvn rubbish started, the only transaction I was allowed with my bank account was to deposit into it. I wasn't allowed to withdraw and transfer out of the account until after bvn registration.

I still don't understand this report. Is it that other bank customers have been freely conducting transactions with their bank accounts without bvn?

Leo, you don't know Nigerians. We are just wired to act like unintelligent folks, both the banks and the banked.

It's a game of numbers for the banks (digital, DMBs) and convenience for the banked.

The way we cut corners in Nigeria affect everyone, but mostly the masses

Didn't bother reading the piece but one thing I'm sure of is this, Tier 3 accounts in Nigeria require BVN (it should be mandatory for all classes of account though regardless of the cumulative balance or single deposit at a time) while the regulatory IDs of which NIN is one is needed either for an upgrade or as requirement for opening a Tier 3 account.

Most people are in the know about this.

dfrost:
Leo, you don't know Nigerians. We are just wired to act like unintelligent folks, both the banks and the banked.

It's a game of numbers for the banks (digital, DMBs) and convenience for the banked.

So many accounts to be placed on PND in the coming days. The PND/Restrictions is automated for some banks once they discover that there are accounts domiciled with them without BVNs.

All in all, Nigeria! I hail thee.

Good! Hopefully the implementation will be thorough this time!

How will ghost workers recieve salary

LeoDeKing:
When this bvn rubbish started, the only transaction I was allowed with my bank account was to deposit into it. I wasn't allowed to withdraw and transfer out of the account until after bvn registration.

I still don't understand this report. Is it that other bank customers have been freely conducting transactions with their bank accounts without bvn?

Naija matter tire person ooo, my acct has been linked for more than four years now, so others dey run transactions without bvn

We just like chaos in this country sef why not just continue to dey register them as they come into the bank?

Offpoint1:
Who are these guys fooling? Are there any Nigerians with active account without BVN since 2014 it was introduced?

The only people who still have account without BVN are likely crook businessmen and politicians who bribed the banks.

No ordinary Nigerian can't create bank account without BVN, be it commercial or mobile banks.

So who are they fooling?

I tire, even those mobile banks dey request bvn, microfinance dey request am, so where is this one now coming from?

This CBN governor is more of a politician than a technocrat, and that might be his undoing

jojothaiv:
Didn't bother reading the piece but one thing I'm sure of is this, Tier 3 accounts in Nigeria require BVN (it should be mandatory for all classes of account though regardless of the cumulative balance or single deposit at a time) while the regulatory IDs of which NIN is one is needed either for an upgrade or as requirement for opening a Tier 3 account.

Most people are in the know about this.

So many accounts to be placed on PND in the coming days. The PND/Restrictions is automated for some banks once they discover that there are accounts domiciled with them without BVNs.

All in all, Nigeria! I hail thee.

When they started bypassing BVN for Tier 1 accounts, I knew it's just a matter of time ⏲, the trouble will come.

The banks are also culpable on this.

ambale:
I tire, even those mobile banks dey request bvn, microfinance dey request am, so where is this one now coming from?

This CBN governor is more of a politician than a technocrat, and that might be his undoing

Mobile banks don't make it mandatory for regulatory IDS. Hence I refused to open any.

sms4sure:
I don't think it make sense anymore in this forum for people to criticize every action of Government. I'm sorry, we should just use our head when criticizing pls. Even if you don't like the Government of the day that doesn't mean what they are saying is out of point.

No one is criticizing them, but they you no get bvn?

Is it not linked to your accounts?

Corruption has eaten off the better part of this country, so for eight years, people have been bypassing the law without consequence and there was a government then, which happens to be a government loved by this same government lovers

Wee not serious at all, they stopped me from withdrawing then, that I needed bvn to transact, now una dey bring another thing up.

Make this man sha do wet in he want, cos it seems he only came to play

dfrost:
Mobile banks don't make it mandatory for regulatory IDS. Hence I refused to open any.

Its not mandatory but opay make it mandatory if you want to transact higher

Maybe na those ones dem deg target sha ooo

Or new bank account holders

Offpoint1:
Who are these guys fooling? Are there any Nigerians with active account without BVN since 2014 it was introduced?

The only people who still have account without BVN are likely crook businessmen and politicians who bribed the banks.

No ordinary Nigerian can't create bank account without BVN, be it commercial or mobile banks.

So who are they fooling?

there are accounts without bvn and it's due to ignorance and it is entirely the bank fault for not educating the customers. There was an account I created for one of my child almost a decade ago.

I have never withdrawn from it but only deposit, I could remember when the issue of bvn came in 2015, I asked the guy if it will affect my baby's account and he said "what concern bvn with children" and I left and have been depositing monthly without problem.

Sometime last year I couldn't make deposit, it was saying account does not exist, so when I got to bank to complain I was told to link my bvn to that account.
They failed to inform customers when there is a new policy

sms4sure:
I don't think it make sense anymore in this forum for people to criticize every action of Government. I'm sorry, we should just use our head when criticizing pls. Even if you don't like the Government of the day that doesn't mean what they are saying is out of point.

which criticism are you referring to?

what is the government policy being criticised and what is the merit of the government policy?

did you use your head to understand why people are criticising?