In a move aimed at bolstering financial system stability and reinforcing Know Your Customer (KYC) procedures, the Central Bank of Nigeria (CBN) has issued a circular on Friday, notifying banks of its decision to freeze bank accounts lacking valid Bank Verification Numbers (BVNs) or National Identification Numbers (NINs) starting April 2024.
The circular, jointly issued by Chibuzo Efobi, the Director of Payments System Management Department, and Haruna Mustapha, the Director of Financial Policy and Regulation Department, lays out stringent measures to be implemented by financial institutions.
The apex bank’s directive instructs banks to impose a “Post no Debit” restriction on all existing Tier-1 accounts and wallets without BVN or NIN.
This restriction prevents customers from making withdrawals, transfers, or any other debits until the requisite identification processes are completed.
The immediate implementation of this restriction for unfunded accounts or wallets is emphasized, while funded accounts or wallets will face the same restriction from March 1, 2024, with no further transactions permitted.
To ensure compliance, the CBN has set a deadline of January 31, 2024, for the electronic revalidation of all BVN or NIN attached to accounts and wallets.
The bank plans to conduct a BVN and NIN verification shortly, marking a crucial step in its commitment to promoting financial system stability and enhancing KYC procedures within financial institutions.
As part of a comprehensive audit, the CBN will scrutinize BVN and NIN records, applying appropriate sanctions for any identified breaches.
In a bid to streamline the account opening process, the CBN outlined plans to electronically retrieve BVN or NIN-related information from the Nigeria Interbank Settlement System’s (NIBSS) BVN or the National Identity Management Commission’s (NIMC) NIN databases.
This information will become the primary data for onboarding new customers, and existing customer accounts with validated BVNs will be promptly profiled in the NIBSS’ ICAD within 24 hours of opening accounts or wallets.
For potential customers without a BVN or NIN, the CBN has advised regulated financial institutions to initiate the enrollment process promptly.
This move aligns with the CBN’s broader strategy to enhance the security and integrity of the banking system while ensuring that customers’ identification information is up-to-date and aligned with regulatory standards.
As the April 2024 deadline approaches, Nigerian banks are gearing up to implement these measures, recognizing the significance of these directives in not only complying with regulatory requirements but also in fortifying the overall resilience of the nation’s financial sector.
The CBN’s proactive approach reflects its commitment to fostering a secure and accountable financial environment in Nigeria.
