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The Central Bank of Nigeria (CBN) is probing banks’ enrollment of their customers in the Bank Verification (BVN) platform to ensure the integrity of the process, The Nation learnt yesterday.

The BVN gives a unique identity across the banking industry to each customer of Nigerian banks. But many banks are breaching the BVN enrolment process.

In some cases, customers BVNs are attached to wrong accounts due to improper validation. The practice, if not addressed, could present serious identity crisis in the financial system.

Besides, some banks are not submitting names of their customers identified through their BVNs to be involved in suspected fraudulent activities to the apex bank as required by regulation.

The CBN had directed banks to establish a database of their customers identified through their BVNs to be involved in confirmed fraudulent activities.

The directive is contained in the Regulatory Framework for BVN Operation and Watch-list for Nigerian Financial System released by the CBN. The framework is in exercise of the powers conferred on the CBN, by Sections 2 (d) and 47 (2), of the CBN Act, 2007, to promote the development of efficient and effective payments systems for the settlement of transactions.

The watch-list comprises a database of bank customers’ identified by their BVNs, who have been involved in confirmed fraudulent activity in the banking industry.

Confirming the development, Principal Manager, Banking and Payment System Department of the CBN, Olubukola Akinwunmi, said identity theft is a serious challenge that needed to be tackled in the industry and needs the collaboration of all stakeholders.

He said the apex bank is currently auditing the BVN process in banks ‘to ensure system integrity’.

According to him, banks were aware of the ongoing audit exercise and that at the right time, sanctions will apply to culpable lenders.

AkinwunmI, who represented CBN Director, Banking Service Department, ‘Dipo Fatokun, at the Access Bank Anti-Fraud Week Stakeholders’ workshop held in Lagos, spoke yesterday.

On how banks are culpable in identity theft, he said: “I think the clarity I want to give to this is that banks have the responsibility to enroll their customers. And they also have the responsibility to ensure that when a customer comes to enroll on the BVN platform, they do the necessary verification for that exercise. Those are areas banks need to improve on their controls to ensure that appropriate steps are taken and customers are properly validated before they get the BVN.

On BVNs not matching account holders, he said: “That is something that banks are in charge of reviewing their accounts regularly and ensuring that their data is clean. So, it is a regular cleansing activity that banks do.

“The banks have really done so well in terms of collaboration. We have the industry fraud desk on collaborating to address issues of fraud especially those related to identity theft, internet fraud and all that.

“The CBN is tackling the issue of identity theft seriously. In the industry, collaboration is the key word. No single individual or institution can do it alone. The banks are collaborating with the Central Bank.

‘Beyond that, the banks are also collaborating with other regulators such as the Nigerian Communication Commission, on the issue of SIM Swap that we have seen in the industry in recent past. We have joint technical committee and memorandum of understanding to address certain issues that will help us tackle the problems.”

On banks not doing enough to blacklist watch-listed customers, he said: “It takes a while to actually finalize investigations. So, what we do is to ensure that banks are encouraged to do the needful as soon as possible in order to conclude investigation.

“You cannot just pick on anyone without being sure of your facts. The process of determining who should be watch-listed for fraudulent activities or not may take a while. But notwithstanding, we have continued to encourage banks to expedite action on some of these issues in order to have a conclusive issue on any account that may be related in any way to fraudsters or might have received a fraudulent posting. So, banks are working to ensure they expedite their investigations in order to do the needful in terms of watch listing.

“Now, banks have been very responsive to issues, or any initiative to arrest the malaise. So, we expected that this will continue to trend downwards. In the past two years, you will see that fraud in electronic banking has been on downwards trend.”

Executive Director, IT and Operations at Access Bank Plc, Ade Bajomo, said that tackling e-fraud is a collective responsibility. “What I can say is that no-one should be relaxed on this matter. All of us need to be vigilant, and where we see fraud. It has to be a zero-tolerance approach.

“This is about sharing information. If you know someone is a criminal and you keep quiet, then that criminal will carry on perpetrating crime. The moment we criminalize that criminal, then the crime stops. This is no brainer. I can only urge all the banks, that have to participate in this watch list process to ensure they actively participate and they do what they need to do to make sure the whole system is as secured as possible.”

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