The Central Bank of Nigeria (the “CBN”) on 1 December, 2023, in its continuous efforts to promote financial system stabilityand accountability, has issued a crucial amendment to the Regulatory Framework for Bank Verification Number (BVN) Operations and Watch-List for the Nigerian Banking Industry.This circular is aimed at addressing exploitable loopholes for money laundering and terrorist financing activities through the financial system. The key highlights are:
1. Mandatory use of BVN or National Identification Number (NIN): all Tier-1bank accounts and wallets for individuals must now have BVN and/or NIN. (A Tier 1 account is a bank account that can be created with minimal or without any form of document, BVN, NIN or Voters card. The account is opened with personal details, such as first name, last name, sex, date of birth, phone numbers and photograph. The account limit is N50,000 (Fifty Thousand Naira) single deposit and has a maximum account balance of N300,000, 00 (Three Hundred Thousand Naira).
2. Enrollment of new Customers’ Accounts/ Wallets with validated BVN/NIN: the process for opening new customer accounts/wallets will commence by electronically retrieving BVN or NIN information from the Nigeria Interbank Settlement System (NIBSS)‘ BVN or National Identity Management Commission (NIMC)‘s NIN databases.
3. Profiling of all Customers’ Accounts/ Wallets in NIBSS’ Industry Customer Account Database (ICAD): all existing Customers’ Accounts/Wallets for individuals with validated BVN shall be profiled in the NIBSS’ ICAD within twenty- four (24) hours of opening.
4. The circular further mentions that a comprehensive BVN and NIN audit will be conducted, and appropriate sanctions will be applied for identified breaches.
5. Transaction Limits: Strict compliance is required on restrictions for Tier1 Accounts/Wallets regarding transaction values and cumulative balances.
Further, the CBN has noted the following:
1. Effective immediately, no new Tier 1 accounts and wallets should be opened without BVN or NIN.
2. Unfunded Tier 1 Accounts/Wallets without BVN or NIN will be placed on “Post No Debit or Credit” until compliance is achieved.
3. Effective March 1, 2024, funded Tier 1 Accounts/Wallets without BVN or NIN will be placed on “Post No Debit or Credit” with no further transactions permitted.
4. BVN or NIN attached to all accounts/wallets must be electronically revalidated by January 31, 2024.
This circular is aimed at ensuring the sanity and transparency of the financial system and closing the gaps against using the financial system to perpetuate fraud and achieve money laundering and terrorist financing activities through traditional account and wallet systems. It also seeks to control the innovative wallet system which previously was not under any mandatory BVN/NIN compliance net. It is hoped that maximum compliance is achieved on the set timeline of 1st March 2024.
In conclusion, strict adherence to the instructions of this circular is advised. Also, it is advised that the CBN undertakes consistent checks and audits on Accounts and Wallets either quarterly or every six (6) months to ensure full compliance with the instructions of this circular and to ensure financial accountability and transparency.
