CBN Rolls Out Penalties for BVN Infractions

By Sodeinde Temidayo David

The Central Bank of Nigeria (CBN), in a bid to promote financial system stability, has declared that financial institutions and customers that violate the framework of the Bank Verification Number (BVN) would face sanctions.

This was made clear in a circular issued by the CBN on Tuesday to all deposit money banks (DMBs), mobile money operators, super agents, and payment service providers, on the issuance of the revised regulatory framework for BVN operations and watch-list for the Nigeria banking industry.

This framework 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.

The CBN noted that “the following infractions by participants shall attract appropriate penalties.”

According to the apex bank, this includes misuse of the BVN watch-listing process for victimization, improper linking of accounts or wallets (except Tier 1); and other infractions, as may be determined by the CBN.

The central bank said it would ensure all operated accounts or wallets, including the ones open through agents (except Tier 1), are linked with the signatories’ BVNs within 24 hours of NIBSS making BVN available.

The bank added that 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 within 180 days of the issuance of this framework.

“Ensure that BVN details of all signatories, directors and beneficial owners are linked to their respective non-individual accounts/wallets (except Tier 1),” a part of the disclosure said.

The apex bank also stated that it is mandatory for non-resident non-Nigerian directors of corporate accounts to have a BVN.

Some of the penalties listed for financial institutions having a customer operating an account without BVN will be N2,000,000 per infraction/customer, 15 per cent of the total amount credited into the account during the period infraction exists and N20,000 penalty per infraction/customer per day after the infraction exists.

Also, the failure to capture customers’ biometrics and biodata in line with the BVN Framework comes with N2,000,000 penalty.

As per infraction or customer, the failure to report customers’ BVN for watch-listing attracts N200,000 penalty per infraction or customer.

Furthermore, the failure to correctly report the BVN of a deceased customer will attract a N100,000 penalty per infraction or customer, while failure to follow due process in confirming and designating a customer as deceased will result in a N20,000 penalty per customer per day after the infraction exists.