*Revised Guidelines To Checkmate Fraud, Boost Confidence In Financial System
*Reveals Law Enforcement Agencies, Others May Request For Customers’ Biometric Data

The Central Bank of Nigeria (CBN) yesterday issued a revised Regulatory Framework for Bank Verification Number (BVN) Operations and Watchlist for the Nigerian Banking Industry, spelling out sanctions and punishment for breaches by customers and other stakeholders.

The framework seeks to among other things, define roles and responsibilities of participants in the BVN system;

define BVN operations in Nigeria; access, usage and management of the BVN system; outline operations of the BVN Watch-list process; define sanction regime for breaches in BVN operations as well as deter fraud incidences in the Nigerian Banking Industry.

Under the new framework, no new account/wallet (except Tier 1) shall be allowed to operate without BVN (except inflows).

However, any account/wallet (except Tier 1) without BVN shall be closed within 30 days, the CBN said.

For customers who breach the BVN regulations and subsequently placed on the watchlist, such persons or organisations shall not be allowed to enter new relationship with any participant including banks and other financial services providers.

Also, a participant may choose not to continue business relationship with account/wallet (except Tier 1) holder on the watch-list.

The bank further explained that where a participant chooses to continue an existing business relationship with holders of account/wallets(except Tier 1) on the watch-list, such account/wallet (except Tier 1) holder shall be prohibited from all electronic channels including but not limited to ATMs, PoS, internet banking, mobile banking, USSD including issuance of third-party cheques.

However, inflows may be allowed, provided these are from legitimate sources, the apex bank added.

According to the new guidelines, a customer with watch-listed BVN shall not reference accounts, access or guarantee credit facilities and shall remain on the Watch-list for a specified period.

The bank also pointed out that in the event of a recurrence of breach, the penalty period shall run consecutively.

The apex bank, in the revised framework signed by CBN Director, Payment System Management Department, Mr. Musa Jimoh, said the move was in line with the bank’s mandate to promote financial system stability and reduce fraud and boost confidence in the system.

The framework defines the operations of BVN as well as the establishment and operations of a Watch-list for the Nigerian Banking Industry, to address increasing incidence of frauds and to enhance public confidence in the banking industry.

The CBN states that, “This framework, without prejudice to existing laws, is a guide for the operations of the Watch-list in the Financial System.

“The Watch-list is a database of customers identified by their BVNs, who have been involved in confirmed cases of breaches, as defined within the framework.”

Under the new regime, customers shall provide accurate biometrics and biodata, abide by the regulatory framework for BVN operations and Watch-list; report all suspicious or unauthorised activities on their accounts/wallets (except Tier 1) to their banks /OFIs, among other requirements.

The CBN, in spelling out roles and responsibilities of stakeholders said Banks and Other Financial Institutions (OFIs) Banks and Other Financial Institutions shall be involved in the BVN operations as approved by CBN including the following ensure proper capturing of the BVN data (including BVN captured by their agents) and validate same before the linkage with customers’ accounts/wallets (except Tier 1) in line with the provisions in the SOG; ensure all operated accounts/wallets (except Tier 1) (including accounts/wallets (except Tier 1) opened through agents) are linked with the signatories’ BVNs within 24 hours of NIBSS making BVN available; enroll all mobile money wallets (except Tier 1) subscribers on the BVN database and link their wallets (except Tier 1) with their BVNs within one hundred and eighty days (180) days of the issuance of this framework; ensure that BVN details of all signatories, directors, and beneficial owners are linked to their respective non-individual accounts/wallets (except Tier 1).

“This is also mandatory for Non-resident Non-Nigerian Directors (NRNND) of corporate accounts, the bank said.

Banks are also to ensure customer’s name on the BVN database is the same in all of his/her accounts/wallets (except Tier 1) across the Banking Industry; report the BVNs of individuals in breach to NIBSS for update on the Watch-list within 1 business day of breach; report the BVNs of confirmed deceased customers to NIBSS for designation as “Deceased” on the BVN database within 24hrs of confirmation; use the Watch-list report submitted by participants and duly endorsed by the MD/CEO of the Institution, with clearance from the Director, Risk Management Department of CBN to delist the BVN from the watch-list.

The CBN also stated that without prejudice to the extant laws of Nigeria, law enforcement agencies; National Pension Commission; Pension Fund Administrators may be granted BVN information upon presentation of valid Federal High Court orders under the new regulations.

Individuals are not eligible to access BVN information, other than their own, the bank added.

On the restrictions on the use of BVN, the bank stated that its use shall be restricted only to purposes specified by the CBN.

“The following shall constitute abuse of the BVN: Use of BVN to sanction individuals for non-financial offences; Use of BVN for identification outside the banking system; and any other misuse, as may be designated by the CBN,” the apex bank further explained.

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