Banks will
soon crack down on customer’s accounts following new directives from the
Central Bank of Nigeria (CBN) yesterday, on Bank Verification Number (BVN)
operations and watch-list for the banking industry.
Records from
the NIBSS show that there were about 45.85 million total bank accounts
unlinked, but when compared with the active accounts the number dropped to
15.72 million unlinked to BVN as of February 2017.
The record
further shows that as of October 8th, 2017, the total BVN issued were
30,511,506.
In a memo to
the Nigeria Inter-Bank Settlement System (NIBSS), Deposit Money Banks (DMBs)
and Other Financial Institutions (OFIs) obtained by Daily Trust signed by Mr. Dipo Fatokun, Director Banking
and Payment System, the apex bank warned banks and OFIs to ensure proper
capturing of the BVN data and validate same before linkage with customers’
accounts; ensure all operated accounts are linked with the signatories’ BVN;
and ensure customer’s names on the BVN database are the same in all of his/her
accounts, across the banking industry.
Some
intelligence reports observe recently that some banks have relaxed the BVN
linkage of some customers, a situation that will allow fraudulent transactions
in the banking system, a source in the banking industry told Daily Trust.
With the new
circular, the apex regulator orders banks to report confirmed fraudulent
individuals’ BVNs to NIBSS for update of the watch-list database; report the
BVN of deceased customers to NIBSS for update on the BVN database; render
returns to NIBSS for enlisting individuals involved in confirmed fraudulent
activities, with the report signed by the chief audit executives.
The new
regulation also states that CBN (Banking Supervision Department) shall be
granted real-time online access to the watch-list database while the chief
audit executive of the customer’s bank shall be notified, where a bank needs to
watch-list a customer of another bank.
The chief
audit executive of the customer’s bank, upon notification, shall investigate
within one month and after confirmation of the fraudulent activity, watch-list
the customer within two business days.
CBN also
mandates NIBSS to ensure BVN data are stored within the shores of Nigeria and
shall not be routed across borders without the consent of the CBN while users
of the BVN information shall establish adequate security procedures to ensure
the safety and security of its information and those of its clients, which
shall include physical, logical, network and enterprise security.
Appropriate
penalties shall apply to any bank that fails to enlist individuals confirmed to
be involved in fraudulent activity, it said.
“Any other
stakeholder who fails to perform its stipulated responsibilities shall be penalized
by the CBN. A watch-listed individual shall not be allowed to enter into new
relationship with any bank. A bank may choose not to continue business
relationship with account holder on the watch-list.
“Where a
bank chooses to continue an existing business relationship with holders of
account on the watch-list, the account holder shall be prohibited from all
e-channels, such as ATM, POS, Internet Banking, Mobile Banking, including
issuance of third-party cheques.
“A
watch-listed customer shall not provide reference to another customer, neither
shall he/she be allowed access to credit facility or guarantee credit
facilities,” the new circular directed.
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