Any customer or entity operating an account or wallet without a Bank Verification Number (BVN) will pay a penalty of N2 million, the Central Bank of Nigeria (CBN) says in its guidelines.
In a circular to all Deposit Money Banks (DMBs), Mobile Money Operators (MMOs), Super Agents, and Payment Service Providers (PSPs), dated October 12, 2021, and signed by Musa Jimoh, director, payments system management department, the CBN said 15 percent of the total amount will be credited into the account during the period infraction exists and N20,000 penalty per infraction/customer per day after the infraction exists.
Nigeria’s Central Bank in collaboration with the Bankers’ Committee deployed a centralised BVN System in February 2014.
This is part of the overall strategy of ensuring the effectiveness of Know Your Customer (KYC) principles, and the promotion of safe, reliable, and efficient payments systems. The BVN system gives each customer in the Nigerian banking industry a unique identifier number.
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The framework, according to the banking sector regulator, defines the operations of BVN as well as the establishment and operations of a Watch-list for the Nigerian Banking Industry, to address the increasing incidence of frauds and to enhance public confidence in the banking industry.
Without prejudice to existing laws, the framework is a guide for the operations of the Watch-list in the Financial System. The Watch-list is a database of customers identified by their BVNs, who have been involved in confirmed cases of breaches, as defined within the framework.
The guidelines titled, ‘the revised Regulatory Framework for the Bank Verification Number Operations and Watch-list for the Nigerian Banking Industry’, stated that any participant who fails to perform its stipulated responsibilities shall be penalised by the CBN.
A customer whose BVN is on the Watch-list shall not be allowed to enter a new relationship with any participant, the framework stated. Participants are entities or individuals involved in the BVN operations.
In the same vein, a participant may choose not to continue business relationship with account/wallet (except Tier 1) holder on the Watch-list, and where a participant chooses to continue an existing business relationship with holders of account/wallets(except Tier 1) on the watch-list, the account/wallet(except Tier 1) holder shall be prohibited from all electronic channels such as but not limited to ATM, POS, Internet Banking, Mobile Banking, USSD including the issuance of third-party cheques. However, inflows may be allowed, provided these are from legitimate sources.
The framework lists the following infractions by participants, which shall attract appropriate penalties, including misuse of the BVN watch-listing process for victimisation; improper linking of accounts/wallets (except Tier 1); and other infraction(s), as may be determined by CBN.
