When the Central Bank of Nigeria’s directive on restricting accounts without Bank Verification Numbers and National Identification Numbers goes into effect, over 70 million bank customers could lose access to their accounts.
In a circular dated December 1, 2023, the CBN ordered that all bank accounts lacking the BVN and NIN be subject to a “Post no Debit” restriction starting on Friday, March 1, 2024.A restriction put in place by banks on particular accounts that prohibits users from making withdrawals, transfers, or any other kind of debit from those accounts is known as a “post no debit.”
This action essentially freezes the account’s funds, making them unavailable while the restriction is in place.The directive, which was jointly signed by Haruna Mustapha, the director of financial policy and regulation, and Chibuzo Efobi, the director of payments system management department, stated that “having a BVN and/or NIN is required for all Tier-1 bank accounts and wallets for individuals.”
Individual wallets and Tiers 2 and 3 accounts are still required to have a BVN and NIN.”With immediate effect, all unfunded Tier-1 accounts and wallets that do not have a BVN or NIN will be set to ‘Post No Debit or Credit’ until the new procedure is completed. All funded wallets and accounts will be set to “Post No Debit or Credit” on March 1, 2024, after which no more transactions will be allowed. By January 31, 2024, every account and every wallet must have its BVN or NIN electronically revalidated.
The circular continued by alerting banks around the nation to the impending “comprehensive BVN and NIN audit” and the “appropriate sanctions that shall be applied where breaches are identified.”Several banks reminded their clients to regularize their accounts in accordance with the new CBN directive as the deadline drew near. Some allowed customers to update their accounts online, while others requested that they visit their physical branches.
“Please make sure that your Bank Verification Number and National Identification Number are linked to your account number on or before February 29, 2024,” FirstBank Nigeria wrote to customers via email.”Any nearby FirstBank branch can help you easily update your account information with your BVN and NIN.
The Central Bank of Nigeria has directed that, as of March 1, 2024, all funded accounts without BVN be placed on “Post No Debit or Credit,” with no further transactions allowed. This directive was made through its circular PSM/DIR/PUB/CIR/001/053, dated December 1, 2023.”Please be informed that the Central Bank of Nigeria has announced that all accounts without the National Identity Number and/or the Bank Verification Number will not be able to carry out transactions from March 1, 2024,” Ecobank Nigeria wrote in a circular dated December 1, 2023.
As a result, if you have not already, you will need to update your account information with your Bank Verification Number and National Identity Number. But it did provide an online fix.As required by the top bank, fintech company OPay also urged its clients to finish regularizing their accounts by linking their NIN or BVN, providing them with both online and offline choices.
A bank account that can be opened with little to no documentation is known as a Tier-1 account. This type of account, which is intended for the unbanked population, can be opened with a passport photo, has a N50,000 deposit cap, and a N200,000 operating balance. It is typically not connected to the BVN.
Fintech companies dominate this market, and there are worries that the loose Know Your Customer regulations are opening doors for fraudulent activity.While the policy was a good step to improve banks’ KYC requirements, its implementation was concerning, according to Sarafadeen Fasasi, National President of the Association of Mobile Money and Bank Agents in Nigeria, who called for an extension of the deadline.We are all aware that having strong KYC is a good policy for the system, but the implementation is proving to be difficult, he said.
This implementation is incorrect as well. The access points must have been provided before a deadline is given. Out of the 200 million individuals predicted to have NINs, there are currently approximately 104 million NINs.
Consequently, there is a roughly 100 million gap.The BVN, which as of the most recent report was approximately 59.9 million out of 134 million expected bank accounts, is the same.
This implies that more than 70 million of our accounts will be impacted.As of 2021, there were approximately 133.5 million active bank accounts in the nation, of which about 120 million were savings accounts, according to Statista data.
According to Fasasi, the National Identity Management Commission is incapable of providing 100 million NINs in the allotted time.”Can the NIMC deliver the gap of about 100 million NINs within the deadline?” he asked.
Since the answer is no, why should this cause Nigerians to experience further issues? We have a huge delivery gap for BVNs, and as of right now, only bank branches are able to enroll BVNs.
According to our research, out of the 774 local government areas (LGAs) in Nigeria, about 300 LGAs do not have bank branches. Therefore, who will be responsible for providing BVN enrollment in those LGAs? It implies that difficulties will be encountered by people.
Additionally, the banks have only ever enrolled 500,000 people a month at the highest level. For this, we are not prepared. What is the rush? Why do not we schedule this goal for each month, taking into account our access points and capacity?
He bemoaned the fact that this was happening concurrently with telecom companies being ordered by the National Communications Commission to prohibit mobile lines without the NIN.”In this crucial time when everyone is moaning due to unfavorable economic conditions, who is pursuing us in Nigeria? They want to cause more trauma; I believe we should reevaluate this,” he said in closing.
Moses Igbrude, the Chairman of the Consumer Rights Awareness, Advancement and Advocacy Initiative, stated that the central bank should evaluate the degree of compliance prior to applying severe penalties.”You need to investigate the challenges and the individuals in charge of the NIN and BVN,” he declared. What about Nigerians living abroad?
To avoid upsetting the banking system, they ought to extend the time for this connection.“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.”