It will no longer be business as usual for violators of Bank Verification Number (BVN). They have been barred from opening new bank accounts going by a fresh Central Bank of Nigeria (CBN) rule.
The new policy is contained in a Revised Regulatory Framework for Bank Verification Number (BVN) operations and Watch-List for the banking industry released by the apex bank in its Update Report circular.
According to the bank, the new framework has been designed to enhance the effectiveness of customer due diligence and Know Your Customer (KYC) processes.
The CBN described the policy as part of its overall strategy for promoting a safe and efficient banking and payment system.
In the circular, the Director, Payments System Management Department, Musa Jimoh, explained that the watch-list is a database of customers identified by their BVNs, who have been involved in confirmed cases of breaches.
He explained that under the new framework, breaches on the part of customer could see the individual getting barred from entering a new relationship with any participant (banks).
Musa said that where a financial institution chooses to continue an existing business relationship with holders of an account/wallets on the watch-list, the account holder shall be prohibited from all electronic channels such as but not limited to Automated Teller Machine, Point of Sale , Internet Banking, Mobile Banking, USSD including the issuance of third- party cheques.
He said: “The new framework further stipulates that a customer with watch-listed BVN shall not reference accounts, access or guarantee credit facilities, thus, breaches it continued on the customer’s part include – use of forged documents, forgery, compromise, complicity and connivance.
“Also listed as punishable breaches were: duplicate enrolment, use of fictitious information, receipts of proceeds of deception, deception, receipts of fraudulent proceeds and any infractions on Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws, and dishonest acts.
“Others were non-cooperation with efforts (as stipulated in the Regulation on Instant Interbank Electronic Funds Transfer) to reverse wrong credit, erroneous, multiple or duplicated payments or credits; and any infringement of the Cybercrimes (Prohibition, Prevention, etc.) Act. 2015.
The director also said that those who misuse identity and financial information and indulge in identity theft and breach of confidentiality will be punished in line with the new regulations.
“Banks and other financial institutions involved in BVN operations were instructed by the CBN to ensure all operating accounts/wallets are linked with the signatories’ BVNs within 24 hours of availability,” the circular said.
The CBN also instructed that operators must enroll all mobile money wallets (except Tier 1) subscribers on the BVN database and link their wallets (except Tier 1) with their BVNs within 180 days of the issuance of this framework.
The CBN, however, said it would continue to monitor industry developments and issue further guidance as might be appropriate in the nearest future.
The regulator said money laundering requires an underlying, primary profit-making crime (such as corruption, drug trafficking, market manipulation, fraud, tax evasion), along with the intent to conceal the proceeds of the crime or to further the criminal enterprise.
These activities, it added, generate financial flows that involve the diversion of resources from economically and socially-productive uses.
The diversions, the circular noted, can have negative impacts on the financial sector and external stability of the economy.