Fear Grips Opay, PalmPay Users Over New CBN Directive

By Bliss Okperan

Users of neo banks like Opay, Carbon, Kuda, and PalmPay, among others, are worried over the new directive of the Central Bank of Nigeria (CBN), which intends to freeze bank accounts not linked to a Bank Verification Number (BVN) and a National Identity Number (NIN).

Last week, the apex bank directed deposit money banks (DMBs) to place a “Post No Debit (PND)’ on any accounts with BVN and NIN from next year.

For most neo banks, account numbers are opened with just users’ phone numbers without the BVN, unlike the traditional banks. However, they cannot make transactions above N50,000 per day as Tier-1 users.

The central bank allowed the opening of bank accounts without BVN as part of efforts to deepen financial inclusion in the country.

To move to tier 2, bank account holders would have to supply their BVNs and to move to the next level, other details of the customers must be supplied.

But the apex bank intends to wipe out all the first level of accounts from April 2024 to check illicit financial transactions.

In the circular issued last Friday, the CBN said, “All the BVN or NIN attached to and/or associated with AL accounts/wallets must be electronically revalidated by January 31, 2024.”

It further said, “It is mandatory for ALL Tier-1 bank accounts and wallets for individuals to have BVN and/ or NIN,” adding that, it remains mandatory for Tiers 2 & 3 accounts and wallets for individual accounts to have BVN and NIN.”

For users of these digital banks, the ease in their fund transfers was a major attraction, as most traditional banks delay completing financial transactions.

Some of them have expressed worry that if the apex bank implements its new directive, it might be difficult for them to continue to operate the accounts.

Recall that in October 2023, one of the traditional lenders, Fidelity Bank, blocked the transfer of funds from its platform to Moniepoint over Know Your Customer (KYC) issues.

The management of Moniepoint had to visit Fidelity Bank to iron out the issues before the service was restored.

This also affected customers of Opay, PalmPay and Kuda, though the service has also been restored.

A few customers disclosed that if the policy is implemented, they might have to abandon their accounts because they opened them due to the inefficiencies of the traditional banks.