BVN: Again, CBN Opens Another Window of Opportunity for Bank Users

Revisiting the issue of registration for Banks Verification Numbers, the Central Bank of Nigeria said that banks should continue to register as well as link customers accounts will not only allay the fears of those who missed the first two deadlines on registration, but will also bring about a regime of transparency in banking In an environment where deadlines are not usually taken seriously, it was not a surprise that despite the recent extension of the deadline on registration for the Central Bank of Nigeria
(CBN’s) Bank Verification Number (BVN), quite a sizeable number of bank customers could still not comply with the directives. According to the Nigeria Interbank Settlement System (NIBSS), about 14.4 million accounts have only been linked among over 50 million active accounts in the industry.

 This pathetic development therefore informed the decision of the CBN to direct banks to continue to open their doors to customers wishing to register for their BVN. Consequently, the apex bank has directed banks to ensure their uninterrupted enrolment on the platform. In a statement signed by its Director (Corporate Communications) Ibrahim Mu’azu, the CBN said although the time frame for the initial enrolment had elapsed, the exercise should go on indefinitely. The BVN, which captures bank customers’ biometric data, such as fingerprints, provides unique identification for them and equally protects their accounts from unauthorised access, identity theft and fraud. Although the apex bank has paved the way for those who could not meet the deadline to approach their banks for registration, restrictions have already been placed on accounts of depositors who failed to meet the October 31 deadline to the extent that although deposits could be made, but withdrawal from such accounts has been suspended until the BVN is obtained from the banks.
 Another Opportunity Muazu said customers who are yet to register are required to do so to avoid restrictions on their accounts. “Account holders who are yet to obtain their BVN are enjoined to visit their banks and do the registration. There are two steps to the BVN process. The first step is to obtain a BVN while the second step requires the account holder to link the BVN with his or her bank account(s),” he said. Mu’azu said an individual could enroll for a BVN without necessarily having a bank account. Such individual can then submit the acquired BVN at any bank he/she wishes to open an account. He said linking BVN to bank accounts is now a one-stop-shop which enables account holders to register and link their BVN to their accounts in one location, irrespective of the banks in which they have their accounts. All these are aimed at making the process as seamless as possible.

 Not Susceptible to Frauds “The BVN is neither a payment instrument nor an account number and therefore cannot be used to access any account by unauthorised users,” Mu’azu said. Dispelling the rumour that fraudsters could use depositors’ BVN to gain unathourised access into people’s account, Muazu explained that such a development is not possible, adding that a third party cannot break into people’s account unless the fraudster has the account owners’ other forms of identification like the token or pin. He pointed out that BVN has made it difficult for delinquent borrowers to go from bank to banks given the universality of BVN numbers among banks. According to him, a number of people with questionable sources of wealth will also find it difficult to maintain secret accounts because once the BVN is known, it will link all his accounts in all the banks. For business owners, the apex bank explained that it is necessary for all the signatories to the company’s accounts to register their BVN.

 No Security Risk Meanwhile, the CBN has declared that the provision of BVN by customers at the point of foreign exchange purchase or for any legitimate banking transaction with all banks and licensed Bureaux de Change does not attract any security risk. It said: “The adoption of BVN as a condition for the purchase of forex is expected to reduce the incidence of multiple purchases, round tripping and illicit transfer of funds, facilitate enforcement of authorised limits of forex sales to end users, sanitise the retail segment of the market and engender policies that will facilitate better allocation of the forex, based on genuine demands,” the bank explained in a statement. “The BVN is neither a payment instrument nor an account number and therefore could not be used to access any account by unauthorised users. The banks, BDC operators and even regulators use the BVN to validate the identity of a customer using some biometric information such as finger prints and photograph obtained at the point of enrolment. “The BVN provides the unique identity of each customer for the purpose of achieving effective “Know Your Customer” (KYC) principle and fraud prevention.

Customers can easily get their BVN from the mobile phone number submitted during the enrolment by dialling *565*0#. Please be guided properly,” it said. The CBN has therefore mandated that all banks and licensed Bureaux de Change (BDCs) operating in Nigeria provide Bank Verification Numbers (BVN) as part of the requirement for the sale of foreign exchange to their customers. The apex bank explained that the refusal of customers to disclose their BVN at BDCs, might lead to an increase in demand for foreign exchange needs in black market which will in turn result to a rise in the parallel market exchange rate. Meanwhile, Bureaux De Change (BDC) operators have begun the validation of their customers’ Bank Verification Numbers (BVNs) on a portal created by the Nigeria Interbank Settlement System (NIBSS). NIBSS Managing Director Ade Shonubi, who disclosed this said the firm developed the platform to enable BDCs comply with the Central Bank of Nigeria (CBN) directive that BDCs customers provide their BVN before buying foreign exchange.

The policy, Shonubi said, is in line with CBN’s drive to stabilise the forex market, stem the rampant cases of forex leakages and illicit money transfer from the country. He said NIBSS had deployed two services on the Web and phone that would make BVN verification for BDCs customers and others as easy as possible. Shonubi said customers are charged N10 for phone transaction and N20 for the web portal, which the customer would be required to pay either with credit card or Internet banking. According to him, the essence of the verification is to checkmate sharp practices among BDCs operators and customers. He, however, noted that once a customer carries out the verification either on phone or the Web portal, such customer does not need to verify again when dealing with the same BDC operator. Central Bank of Nigeria (CBN) had estimated that given the assessed tradition of multiple accounts holding by an average Nigerian, which was estimated at two or three per account holder, there could be a little over 50 million active accounts that possibly have been involved in the BVN project. “The point needs to be stressed here that it is not enough to just enroll for BVN.

The process is duly concluded only when all accounts owned by bank customers are linked to their respective BVNs.” For customers who have issues linking their accounts, NIBSS spokesperson, Lilian Phido, said her agency, which hosts the platform for the project, is not to blame and has no answer to that, as the platform has been tested and ready for capturing of information and responding where necessary. Go Back to Your Banks “The customers should go back to their respective banks to sort it out. The linking is done at the bank. Once they contact the platform, you can be sure that it will be linked and the customers would have unhindered access to their accounts. With the increasing incidents of compromise on conventional security systems (password and PIN), there is a high demand for greater security for access to sensitive or personal information in the Banking System. In recent times, biometric technologies have been used to analyze human characteristics as an enhanced form of authentication for real-time security processes. Biometrics refers to identifying an individual based on physiological or behavioral attributes – fingerprint, signature etc.

 The Central Bank of Nigeria through the Banker’ Committee and in collaboration with all banks in Nigeria on February 14, 2014 launched a centralised biometric identification system for the banking industry tagged Bank Verification Number (BVN). With the increasing incidents of compromise on conventional security systems (password and PIN), there is a high demand for greater security for access to sensitive or personal information in the Banking System. In recent times, biometric technologies have been used to analyze human characteristics as an enhanced form of authentication for real-time security processes.