CBN rules have stopped BVN violators from opening bank accounts
Violators of the Bank Verification Number will no longer be able to do business as usual (BVN). According to a new Central Bank of Nigeria (CBN) rule, they are no longer allowed to open new bank accounts.
The new policy is detailed in the apex bank’s Update Report circular, which includes a Revised Regulatory Framework for Bank Verification Number (BVN) operations and a Watch-List for the banking industry.
The new framework, according to the bank, is intended to improve the efficiency of customer due diligence and Know Your Customer (KYC) processes.
The policy is part of the CBN’s overall strategy for promoting a safe and efficient banking and payment system, according to the CBN.
The watch-list, according to Musa Jimoh, Director, Payments System Management Department, is a database of customers identified by their BVNs who have been involved in confirmed cases of breaches.
He explained that under the new framework, customer breaches could result in the person being barred from entering a new relationship with any participant (banks).
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Musa stated that if a financial institution chooses to continue a business relationship with holders of accounts/wallets on the watch-list, the account holder will be barred from using all electronic channels, including but not limited to ATMs, Points of Sale, Internet Banking, Mobile Banking, USSD, and the issuance of third-party cheques.
“A customer with a watch-listed BVN shall not reference accounts, access, or guarantee credit facilities,” he continued, “and thus, breaches on the customer’s part include the use of forged documents, forgery, compromise, complicity, and connivance.”
“Duplicate enrolment, use of fictitious information, receipts of proceeds of deception, deception, receipts of fraudulent proceeds, and any infractions of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws, as well as dishonest acts, were also listed as punishable breaches.”
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“Others included failure to cooperate with efforts (as outlined in the Regulation on Instant Interbank Electronic Funds Transfer) to reverse wrong credit, erroneous, multiple, or duplicated payments or credits; and any violation of the Cybercrimes (Prohibition, Prevention, etc.) Act. 2015.”
According to the director, those who misuse identity and financial information, as well as those who engage in identity theft and breach of confidentiality, will face harsh penalties under the new regulations.
“The CBN has instructed banks and other financial institutions involved in BVN operations to ensure that all operating accounts/wallets are linked with the signatories’ BVNs within 24 hours of their availability,” according to the circular.
Within 180 days of the issuance of this framework, operators must enrol all mobile money wallets (except Tier 1) subscribers on the BVN database and link their wallets (except Tier 1) with their BVNs.
The CBN, on the other hand, stated that it would continue to monitor industry developments and issue additional guidance as needed shortly.
Money laundering, according to the regulator, necessitates an underlying, primary profit-generating crime (such as corruption, drug trafficking, market manipulation, fraud, or tax evasion), as well as the intent to conceal the proceeds of the crime or further the criminal enterprise.
These activities, it continued, generate financial flows that involve the diversion of resources away from economically and socially beneficial uses.
The diversions, according to the circular, could hurt the financial sector and the economy’s external stability.
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CBN rules stop BVN violators from opening bank accounts