Nigeria’s central bank moves to deter fraud incidences in the financial system, releases regulatory framework for BVN operations

Nigeria’s central bank Thursday released a regulatory framework for bank verification number (BVN) operations and watch-list for the Nigerian financial system with the objective of safeguarding the electronic payments system by fending off confirmed fraudsters from the system.

In a circular to all deposit money banks, other financial institutions (OFIs) and other stakeholders in the Nigerian financial system, the CBN said in furtherance of its mandate to develop and enhance the security of the payments system in Nigeria, it is releasing the guidelines to define the roles and responsibilities of stakeholders, the operations of the BVN in Nigeria and to provide a database of watch-listed individuals.

The circular also said the framework would define access, usage and management of BVN information, requirements and conditions.

The watch-list shall comprise a database of bank customers identified by their BVNs who have been involved in confirmed fraudulent activity in the Nigerian banking industry

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It specifically noted that individuals on the watch list shall not be allowed to enter into a new relationship with any bank, adding that if a bank, however, wishes to continue business relationship with an account holder on the watch list, such an account holder shall be prohibited from all e-channels, such as ATMs, POS, Internet Banking, mobile banking, including issuance of third party cheques.

Equally account holders on the watch-list shall not provide references to another customer, neither shall he/she be allowed to access credit facility or guarantee credit facilities.

The circular identified deposit money banks, other financial institutions, law enforcement agents, credit bureaus and other entities as applicable eligible for access to the BVN information, subject to the approval of the CBN. It equally stated that there shall be access fees payable for information on the database and such fees shall be determined by the CBN from time to time.

On update of information on the BVN records such as name change shall be accompanied with supporting documents, while change of date of birth shall be allowed once with supporting documents. Minor correction due to errors shall be supported with valid means of identification.