CBN Directs MFBs, PMIs To Bar Customer Accounts Without BVN

The Central Bank of Nigeria (CBN) has directed microfinance banks and primary mortgage institutions regulated by its “Other Financial Institutions Department to bar customer accounts that do not yet have the Bank Verification Numbers (BVN).
Following the expiration of the December 31, 2017 deadline for such customers to enroll and/or submit their BVN details, such accounts, according to a circular by the CBN, referenced: OFISD/DIR/GEN/018/217, dated January 2, 2018, must be immediately placed on a “post no debit” status.
Non-compliance, the circular warned, will be met with appropriate sanctions.”
This means that while deposits and transfers are to be allowed into such accounts, withdrawals and outward transfers from such accounts are barred.
While BVN enrolments are to continue for customers of such accounts, the ‘post no debt’ restriction would only be removed “when a valid BVN has been obtained and submitted by the customer or the customer has been duly enrolled by your institution,” according to the circular signed by Adedeji J. Adesemoye, for Director, OFISD of the CBN.
The apex bank also directed the financial institutions to continue the conspicuous displace of notices sentizing customers on BVN in the banking hall, while the submission of a monthly progress report on BVN enrollment should be adhered to.
Recall that the CBN initially set a July 31, 2017 deadline for BVN enrollment for microfinance banks, primary mortgage institutions in the rural and urban areas of the country.
This a circular by Mrs. Tokunbo Martins, Director, OFISD of the CBN directed, was in a bid to “support the achievement of the zero default credit targets set for the participating financial institutions in the Micro, Small and Medium Enterprises Development Fund (MSMEDF).”
Customers without BVN linked to their account were to be barred from making withdrawals from those account from August 1, 2017, while MFBs and PMIs, among others, are to forward to the Director, Other Financial Institutions Supervision Department, a schedule of customer accounts with BVN on August 7, 2017.
This, it is further believed, is part of efforts to open opportunities for extending credit to millions of Nigerians without a standard means of identification such as any of: Driver’s Licence, International Passport, National Identity Card and the Permanent Voter’s Card.
The BVN, the circular explained is also expected to minimize the incidence of fraud and money laundering in the financial system, while enhancing financial inclusion, stressing that the project has so far been “very successful” with the DMBs.
The decision to link the MFBs and PMIs via BVN, the apex bank had noted, followed the discovery that most fraud are now perpetrated in that segment of the Nigerian financial system.