More than 70 million bank customers face the prospect of losing access to their accounts as the Central Bank of Nigeria’s directive takes effect, targeting accounts lacking Bank Verification Numbers (BVN) and National Identification Numbers (NIN).
In a circular issued on December 1, 2023, the CBN instructed that a ‘Post no Debit’ restriction be applied to all accounts lacking BVN and NIN starting from Friday, March 1, 2024. This directive entails a freeze on withdrawals, transfers, and other debits from such accounts, effectively locking the funds within until the restriction is lifted.
Signed jointly by Chibuzo Efobi, Director of Payments System Management Department, and Haruna Mustapha, Director of Financial Policy and Regulation Department, the circular emphasizes the mandatory requirement of BVN and/or NIN saying it remains mandatory for Tiers 2 & 3 accounts and wallets for individual accounts to have BVN and NIN.
“For all existing Tier-1 accounts/wallets without BVN or NIN: Effective immediately, any unfunded account/wallet shall be placed on ‘Post No Debit or Credit’ until the new process is satisfied. Effective March 1, 2024, all funded accounts or wallets shall be placed on ‘Post No Debit or Credit’ and no further transactions permitted. The BVN or NIN attached to and/or associated with all accounts/wallets must be electronically revalidated by January 31, 2024.”
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The circular went on to warn banks in the country that a “comprehensive BVN and NIN audit shall be conducted shortly and where breaches are identified, appropriate sanctions shall be applied.”
As the deadline approached, some banks sent out messages to their customers to regularise their accounts in line with the new CBN directive. While some asked customers to visit their physical branches, others made provisions for customers to update their accounts online.
FirstBank Nigeria in an email to customers said, “Please ensure that your Bank Verification Number and National Identification Number are linked to your account number on or before February 29, 2024.
“You can seamlessly update your account information with your BVN and NIN by visiting any FirstBank branch close to you. Please note that the Central Bank of Nigeria through its circular: PSM/DIR/PUB/CIR/001/053 dated December 1, 2023, has directed that effective March 1, 2024, all funded accounts without BVN shall be placed on ‘Post No Debit or Credit’ and no further transactions permitted.”
Ecobank Nigeria wrote, “Please be informed that the Central Bank of Nigeria through its circular dated December 1, 2023, has announced that all accounts without Bank Verification Number and/or the National Identity Number would not be able to carry out transactions from March 1, 2024.
“Consequently, you will be required to update your account information with your National Identification Number and Bank Verification Number if you have not done so already.” It, however, offered an online solution.
Fintech firm, OPay, also called on its customers to complete the regularisation of their accounts by linking their BVN or their NIN as mandated by the apex bank, offering them both online and offline options.
A Tier-1 account refers to a bank account that can be opened with minimal or no form of documentation. Such an account can be opened with a passport photograph and has a limit of N50,000 deposit and an operating balance of N200,000 and is mostly not linked to the BVN and is targeted at the unbanked population.
This space is dominated by fintech firms and there are concerns that the lax Know Your Customer requirements are loopholes that are being used to perpetuate fraud.
The National President of the Association of Mobile Money and Bank Agents in Nigeria, Sarafadeen Fasasi, who called for an extension of the deadline, said while the policy was a good move to improve banks’ KYC requirements, its implementation was worrisome.
He said, “We are all aware that it is a good policy for the system for us to have good KYC, but unfortunately, what we have a challenge with is the implementation. This is another wrong implementation. Before you give a deadline, you must have provided the access points. As of today, we have about 104 million NINs out of 200 million people expected to have NINs. So, there is a gap of about 100 million.
“It is the same thing with the BVN, which as of the last report was about 59.9 million out of 134 million expected bank accounts. That means we have over 70 million accounts, which will be affected.”
According to data from Statista, as of 2021, the number of active bank accounts in the country was around 133.5 million, with savings accounts making up about 120 million.
Fasasi claimed that the National Identity Management Commission lacked the capacity to deliver 100 million NINs within the required timeframe.
He said, “The question is, can the NIMC deliver the gap of about 100 million NINs within the deadline? The answer is no, so why should this drive Nigerians into another problem? For BVNs, we have a huge gap to deliver and only bank branches can enrol BVN as of today.
“Based on our research, about 300 local government areas out of the 774 LGAs in Nigeria have no bank branches; so, who are those who are going to provide BVN enrolment at those LGAs? It means that people are going to run into trouble.
“Also, the highest that the banks have done is 500,000 enrolment per month. We are not ready for this. Why the rush? Why not plan that every month, this is what we want to achieve based on our capacity and access points?”
He lamented that this was coming at the same time as the National Communications Commission had directed telecom companies to bar mobile lines without the NIN.
“Who is pursuing us in Nigeria in this critical period where everyone is groaning under adverse economic conditions? They want to add extra trauma; I think we need to reconsider this,” he concluded.
The Chairman, Consumer Rights Awareness, Advancement and Advocacy Initiative, Moses Igbrude, said the apex bank ought to assess the level of compliance before wielding the big stick.
He said, “You must check the challenges and the parties who are responsible for the NIN and BVN. What of Nigerians in the Diaspora? They should give more time for this linkage so that they will not disrupt the banking system.
“It is a multifaceted issue involving many players. What is the infrastructure required for them to work? Otherwise, they will use a legal way to disenfranchise a lot of people.”
The President, Bank Customers Association of Nigeria, Dr Uju Ogubunka, called for an extension of the deadline to enable more bank customers regularise their accounts in line with the CBN directive.