….wants CBN to extend BVN to MFBs
Nigeria’s finance minister, Kemi Adeosun alleged on Monday that some federal government workers are moving huge government cash out through the Mico Finance Banks (MFBs) where transactions do not require Biometric Verification Numbers (BVN).
Adeosun said her office discovered that that, prior to the deadline for obtaining the BVN, there was movement of a large number of salary accounts of Federal employees from commercial banks to Microfinance Banks (MFBs).
The Minister is now,, strongly soliciting the cooperation of the Central Bank of Nigeria (CBN), in extending the requirement for BVN to account holders in Microfinance Banks (MFBs). This, she said is to facilitate the detection of bank accounts which might have been opened and operated in such banks for ghost workers by fraudulent syndicates.
“This is a suspicious activity and we have already commenced a review of such cases to identify and investigate any cases of fraud,” the Minister informed Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) in a memo with which she appealed that usage of BVN for verification should now apply to the MFBs.
The minister in the correspondence addressed to Emefiele noted that the introduction of the BVN by the CBN has contributed immensely in improving the integrity of the Federal Government payroll on which more than 50, 000 ghost workers were detected and removed.
The CBN had in September in 2016 announced its intention to extend the requirement for the extension of the Bank Verification Number to MFBs in the country, but the exercise has yet to take off.
Adeosun is concerned that such delays pose some challenges as operating bank accounts in Microfinance Banks without requirement for BVN has left a huge loophole, which crminally minded individuals could use to hide and launder proceeds of crime and successfully escape detection by law enforcement agencies.
“Our ongoing efforts to verify the integrity of Federal Government personnel costs and purge the system of fraud and error has made extensive use of the Bank Verification Number as a means of identifying recipients of multiple salaries, and salaries paid into accounts with names that differ to those held on our payroll records.
” The success of this effort has to date yielded the removal of over 50,000 payroll entries,” the Minister emphasised.
Though she noted that extending the requirement for BVN to Microfinance Banks may put a huge financial strain on the smaller Microfinance Banks, the Minister argued that “some MFBs, such as National Police Force Microfinance (NPF), have over 27,000 salary accounts. Our inability to perform checks on such a large number of salary earners is a key risk.”
” I am therefore seeking your co-operation to enforce compliance with BVN on any MFB with over 200 active salary accounts or those above a certain size,” she told Emefiele in the memo.
“This will support the Federal Government’s efforts at reducing leakages to create headroom for the capital projects that will support the growth of the economy.”
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