The Central Bank of Nigeria (CBN), has announced that all bank accounts without Bank Verification Number (BVN) and National Identity Number (NIN) will be frozen, effective March 1, 2024.
The apex bank also stated that all the BVN or NIN attached to and/or associated with AL accounts/wallets must be electronically revalidated by January 31, 2024.
This was contained in a circular addressed to all commercial, merchant, non-interest and payment service banks; as well as Other Financial Institutions (OFIs), and mobile money operators,
Dated December 1, 2023, the circular was signed jointly by the CBN Director, Payments System Management Department, Chibuzo Efobi and Director, Financial Policy and Regulation Department, Haruna Mustafa.
The apex bank noted that henceforth, all existing customer accounts or wallets for individuals with validated BVN shall be profiled in the NIBSS Industry Customer Account Database (ICAD) immediately and within 24 hours of opening accounts/wallets.
The circular highlighted key amendment to Section 1.5.3 of the Regulatory Framework for Bank Verification Number (BVN) Operations and Watch-List for the Nigerian Banking Industry (The Guidelines).
The central bank said the development was part of its effort in promoting financial system stability by strengthening the Know Your Customer (KYC) procedures in financial institutions under its purview.
The new directives entail several pivotal alterations. Individuals holding Tier-1 bank accounts and wallets are now mandated to possess BVN and/or National Identification Number (NIN).
Tier1 accounts are bank accounts that require minimal documentation usually the mere presentation of a BVN and a means of Identification before opening with a maximum withdrawal limit of N50,000 daily and a cumulative balance limit of N300,000.
The requirement for BVN and NIN remains applicable to individual accounts within Tiers 2 and 3.
The account opening process will now involve electronically retrieving BVN or NIN-related information from the NIBSS’ BVN or NIMC’s NIN databases. This data will serve as primary information for onboarding new customers.
Existing individual customer accounts with validated BVNs will now be profiled in the NIBSS’ ICAD within 24 hours of account opening.
The implementation procedures are multifaceted. According to the CBN circular, opening new Tier-1 accounts and wallets without BVN or NIN is prohibited with immediate effect.
From March 1, 2024, funded accounts without BVN or NIN will face restrictions. Unfunded accounts will also be restricted until compliance.
All BVN or NIN associated with accounts/wallets must be electronically revalidated by January 31, 2024.
The CBN has urged compliance officers to familiarize themselves with the Guidance Notes accompanying the circular as they apply to all institutions regulated by the CBN.
Furthermore, a comprehensive BVN and NIN audit is imminent, and sanctions will be imposed on identified breaches.
The revised protocols for onboarding new customers stipulates the prohibition of manual creation of customer profiles with subsequent BVN or NIN attachment and mandatory electronic authentication using BVN or NIN details for new customers.
Any inconsistency, the CBN warned will halt the onboarding process.
Banks are now required to profile customers’ accounts on NIBSS ICAD within 24 hours of generating an account number.
These amendments, the CBN said, are geared towards fortifying the integrity and security of the Nigerian banking system.
The apex bank noted that compliance with these directives is imperative for all regulated financial institutions to ensure seamless operations and avoid penalties.
See circular below: